Volkswagen has announced the completion of a major production expansion in China, opening four new facilities in Qingdao, Foshan and Tianjin in recent months.
The inauguration of three new FAW-Volkswagen joint venture operations in Qingdao (new plant), Foshan (second plant with a third planned by 2020) and Tianjin (new factory) plus the VW FAW Platform Tianjin Branch component plant will boost group ‘localisation’ strategy in China, the automaker said.
Go deeper with GlobalData
With the opening of the second factory in Foshan, a ‘megaplant’ has been built in South China, VW said. Vehicle and component plants in Tianjin, in the north, are also at a single location. Together with the existing gearbox plant, further synergy there will boost production efficiency. All four new factories significantly increase flexibility to react more quickly to customer needs, VW said.
At the recently opened Tianjin plant alone, over 300,000 SUVs will roll off the assembly line each year, thus forming the basis for the group’s SUV campaign.
With annual capacity of 600,000 vehicles per year, Foshan also plays a pioneering role in groups electrification strategy (Roadmap E).
In Qingdao, too, electrified vehicles will be built alongside combustion engine cars in future.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataVW China head Jochem Heizmann said: “We continue to expect the car market in China to develop positively [and we] will continue to grow accordingly.
“With the total market size of around 24m cars sold, growth rates in the lower single-digit percentage range in the vehicle market already mean growth rates of several hundred thousand vehicles per year. That is why we kicked off our SUV and electric mobility campaign in China in 2018, so that we can respond to the needs of our Chinese customers even better than before. At Volkswagen we strive for continued success in this important market.”
The Tianjin plant was opened in August 2018. SUVs, including plug-in hybrids are produced there for VW and Audi brands. Production capacity will be 1,200 a day and 300,000 a year.
In late June, Platform Tianjin Branch opened a component plant to produce chassis for a variety of SUVs.
Foshan plant expansion in June 2018 doubled capacity to 600,000 and MQB platform vehicles built there are gradually being electrified. By 2020, production of modular electric drive matrix (MEB) vehicles as well as MEB battery systems is set to commence.
Heizmann said: “We want to make a significant contribution to electrifying the Chinese passenger car market. Around 40 different electric vehicle models are to be produced in China by 2025.”
Production of VWs in Qingdao commenced late in May. This flexible factory can make MQB models with combustion or electric drive on the same line. The plant also will make MQB battery systems.
The group now has 23 production sites in China and 123 worldwide.
See also: ANALYSIS – VW targets growth in China with FAW
