The Volkswagen Group on Thursday said it would build a new vehicle production plant in Yizheng, in China’s eastern Jiangsu Province, as part of its long-term growth strategy for the market. Contracts were signed today by management board production chief Jochem Heizmann and Winfried Vahland, president and CEO of Volkswagen Group China, together with representatives of long-standing, local joint venture partner Shanghai Volkswagen. The plant will start operating in 2013 and have annual capacity of up to 300,000 vehicles.
Go deeper with GlobalData
The Yizheng plant will be a complete production facility with press shop, body shop, paint shop and assembly hall and around 4,000 direct jobs will be created there.
“China is one of the most important automotive markets of the future and a dynamic growth driver for the Volkswagen group”, Heizmann said at the signing ceremony.
“Together with our Chinese partners we plan to double our production capacity to 3m vehicles by 2013/14. The new plant in Yizheng is a central element of these plans. The group is thus laying the foundations for consolidating and expanding its leading position in China.”.
“With more than 950,000 vehicles delivered in the first half of 2010, Volkswagen Group China has exceeded deliveries in the record year of 2009 by 45.7,” Vahland added. “This strong performance further confirms the success of our young and efficient model range. The new plant in Yizheng makes sure we will be able to meet growing demand from our Chinese customers in future, too.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIn view of what it today described as “dynamic developments on the Chinese automotive market”, the group added a further EUR1.6bn last April to its investment programme for the country to 2012, taking the total to EUR6bn. These investments are financed from the cash flow of the Chinese joint ventures. Some of the funds will be used to double local production capacities by 2013/14. To this end, annual capacity at both the Nanjing and Chengdu plants will be increased to 300,000 to 350,000 units and two new factories will be built. Apart from the Shanghai Volkswagen plant in Yizheng, the Volkswagen Group and FAW-Volkswagen will also be constructing a new vehicle production plant in Foshan, Southern China.
Volkswagen is one of the automotive pioneers in China and founded its first joint venture – Shanghai Volkswagen – in 1985. Today, the group is the largest car manufacturer in China with nine plants and headcount will reach 50,000 this year.
Around 20 VW Volkswagen, Audi and Škoda models are now produced locally and distributed through around 1,300 dealers. The group plans to offer the first locally-produced electric cars in China from 2013/14.
