Volkswagen has denied a local media report and said it has no plans to delay expansion of a car manufacturing plant in south west China.
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The Oriental Morning Post had reported earlier on Wednesday that FAW Volkswagen, VW’s joint car manufacturing venture with FAW Group, planned to postpone expanding a plant in Chengdu by a year as the slowing economy curbs new vehicle demand in the country, Reuters said.
The new assembly line was previously scheduled to start operating in 2010, making 200,000 Jetta and Sagitar sedans annually, but the venture has decided not to proceed with the expansion before 2011, the newspaper had said, citing unnamed sources.
But Volkswagen’s China spokesman told Reuters the automaker had no plans to delay the plant’s expansion from the current 20,000 units a year.
He declined to give details about the expansion but said Volkswagen’s commitment to invest EUR2.4bn (US$3.12bn) in the country three years from 2008 remained unchanged.
According to the paper, citing information previously provided by the joint venture, FAW Volkswagen set up Chengdu in July 2007 with initial capacity of 150,000 units and plans for 350,000-unit capacity eventually.
FAW Volkswagen executives could not be reached for comment.
Car sales growth in China, the world’s second-largest auto market (but likely to become the leader this year) slowed to a single-digit rate in 2008 for the first time in at least 10 years as consumer confidence waned with a slowing economy, Reuters noted, adding that all major foreign automakers there reported slower growth in 2008.
Sales of Volkswagen in mainland China, Hong Kong and Macau increased 12.5% to 1.02m vehicles in 2008, down from 28% growth in the previous year while General Motors’ sales rose 6.1% to 1.09m vehicles last year, down sharply from 18.5% growth in 2007, the report added.
