Official: New VW Plant to Be Built in Southern China

German manufacturer Volkswagen revealed today it has signed contracts for the construction of a new Volkswagen plant at Foshan, in the Southern Chinese region of Guangdong. According to Martin Winterkorn, VW’s Chairman of the Management Board, China has become the Group’s largest and most important sales market.

Winterkorn also revealed expansion plans in China, as the company aims to double its capacity to three million vehicles per year by 2013/14. In order to achieve these goals, the Volkswagen Group is investing about six billion euros in new products and the expansion of production capacities by 2012.

"In the first five months of this year, Volkswagen Group China sold about 778,000 vehicles, exceeding deliveries in the record year of 2009 by a further 48 percent," said Winfried Vahland, President and CEO of Volkswagen Group China. "The tenth plant in China will further reinforce the leading market position of the Volkswagen Group."

Production at the new Foshan plant are scheduled to start in mid-2013. The plant will spread on an area of 170 hectares and will include a press shop, body shop, paint shop and assembly unit. According to the German carmaker, the maximum annual production capacity will be 300,000 units and about 4,000 employees by 2013. The investment of about 520 million euros is to be funded from the cash flow of FAW-Volkswagen.

This year, Volkswagen Group will be launching seven new or modified locally produced models on the Chinese market. By 2012, it is planned to introduce over 20 new models in total, while the production of electric cars is also set to start in China in 2013/2014.