VW is ramping up in China via its local partner FAW

VW is ramping up in China via its local partner FAW

Volkswagen Group China is planning to open three new factories to strengthen its SUV and e-mobility offerings in the world's largest car market.

Three new FAW-Volkswagen production facilities will open in China in the next few months. With new factories in Qingdao, Tianjin, and Foshan, together with the already opened Audi Q plant in Changchun, VW says it is well positioned to do the next steps of electrifying China.

Under its Roadmap E strategy, Volkswagen Group China will release 40 new locally produced NEVs over the next 7-8 years as it prepares to deliver up to 1.5m New Energy Vehicles (NEVs) annually by 2025. Through 2022, Volkswagen Group and its joint-venture partners will be making around 15 billion euros available for e-mobility, autonomous driving, digitalisation and new mobility services, VW says. In addition to direct investments, this also includes expenses for research and development in the field of new technologies, as well as new mobility projects.

At the same time, the new production capacity will help Volkswagen Group drive its SUV offensive forward to meet robust customer demand in fast-growing segments. While advancing localization in China, the new facilities will help streamline regional production by balancing the workload of existing factories.

"Chinese consumers today are demonstrating strong demand for smart, sustainable electric vehicles as well as fun-to-drive, spacious SUVs. The Volkswagen Group is committed to the China market, our largest market globally, and we will continue to provide high quality products," said Herbert Diess, Volkswagen Group CEO.

"China's car market is still growing fast. And so are we. This year, after record first-quarter sales results, the company expects further growth in the total passenger car market of 4 to 5 percent. That means the addition of another one million cars in 2018," said Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft as well as President and CEO of Volkswagen Group China.

New production facilities in Qingdao, Foshan and Tianjin

The introduction of the new Bora on the MQB platform at the Qingdao plant gives FAW-Volkswagen future flexibility to manufacture cars with combustion engines and pure battery cars all on the same production line, VW says. In Qingdao, FAW-Volkswagen will also set up a production for battery systems on the MQB platform.

With the opening of an additional passenger car factory at the Foshan production site as of June, FAW-Volkswagen is further contributing to the fast-growing automotive market in China. With new products from Volkswagen brand and Audi, the new production line will focus on the SUV segment.

The Foshan plant will play an important role in the implementation of Roadmap E, as cars on the currently produced MQB platform will be electrified. In the future, cars on the MEB platform, the modular electrification toolkit specialized for pure battery cars, will also be introduced to the production line as well as the assembly of battery systems for MEB.

FAW-Volkswagen will further strengthen the group's SUV offensive, by producing new models in the Tianjin facility as of August.

'SUV offensive accelerates in China'

Volkswagen Group China's SUV sales were a strong contributor to this year's record first-quarter deliveries of over 1.01 (+13.4 percent) million vehicles in the Chinese mainland and Hong Kong. SUV sales grew by 37.2% compared to the first quarter last year.

The Volkswagen brand will be launching 4 new SUVs in the Chinese market during 2018: the All New Touareg, FAW-Volkswagen's T-ROC, an Advanced Mid-size SUV and SAIC VOLKSWAGEN's all-new SUV Tharu, with a total of 12 models being introduced until 2020. Audi will launch 10 SUV variants to the market until 2022, seven of which will be locally produced and five being fully electric. ŠKODA, having already launched the compact ŠKODA KAROQ5 in March 2018, will also introduce the ŠKODA KAMIQ and KODIAQ Coupé Model later this year, to further broaden its SUV portfolio.