Volkswagen is planning a CNY10bn (US$1.6bn) factory in China that could boost its production capacity by more than 10%, according to local reports.

According to China Daily, The Hunan Research Academy of Environmental Sciences said on its website that it was seeking public feedback on the plant, which would be located in Changsha, Hunan province, and have a capacity to build 300,000 passenger vehicles a year.

Fiat has a new factory in Changsha which builds the Fiat Viaggio variant of the Dodge Dart for China.

Investment in the new VW factory could be worth CNY10bn, said the Changsha National Economic & Technical Development Zone.

Getting such lower-level bureaus to sign off on projects is one of the initial regulatory steps for foreign companies before they receive central government approval, China Daily noted.

The planned factory would add to the estimated 2.38 million vehicles currently being built annually in China by Volkswagen’s various joint ventures with local automakers – including Shanghai Automotive and First Auto Works – across the country.