Volkswagen Investing €2 Billion to Build Two New Factories in China

VW announces 2 billion euro China investment 4 photos
Photo: Volkswagen Group
Volkswagen Investing €2 Billion to Built Two New Factories in ChinaVolkswagen Investing €2 Billion to Built Two New Factories in ChinaVolkswagen Investing €2 Billion to Built Two New Factories in China
Volkswagen Group today announced a major investment in China, where two new factories will be built in the coming years to take advantage of the ever-growing market. The largest foreign automaker in China will, together with their local partners, invest €2 billion ($2.7 billion) to built new assembly lines in the coastal cities of Qingdao and Tianjin.
“China has become our largest and most important market. To satisfy the demands of our customers in the country, we are engaging in a further substantial expansion of our capacities in China together with our Chinese partner FAW Volkswagen,” said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Group.

The locations were chosen based on the qualified workforce in the regions and the highly developed infrastructure in the region. Tianjin is also going to become the hub of DSG (dual clutch gearbox) production in China at the end of 2014, indicating that a more premium car like the all-new Passat could be built at the new factory.

Volkswagen Group and their Chinese joint venture partners, FAW-Volkswagen and Shanghai-Volkswagen, last year outsold General Motors to become the biggest automotive company in the country. The 1.51 million vehicles they sold in first five months of 2014 (January to May) represented an 18% increase over the same period of 2013.

In an older statement made three months ago, chairman Winterkorn said he expects China's deliveries will increase by a further 10% this year, helping the company achieve roughly 3.5 million deliveries globally.

The announcement was made following German chancellor Angela Merkel's recent visit to the Volkswagen plant in Chengdu, southwest China, where she was accompanied by chairman Winterkorn. Merkel gained insight into VW's vocational training in Chengdu, where 7,300 employees make about 450,000 vehicles per year.

The world's second largest economy and the biggest car market by volume, China is expected to have 1 billion licensed drivers in the next 15 years. Taking advantage of this, Volkswagen Group has already announced it will incest €18.2 billion ($24.7 billion) in development and production facilities through 2018.
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About the author: Mihnea Radu
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Mihnea's favorite cars have already been built, the so-called modern classics from the '80s and '90s. He also loves local car culture from all over the world, so don't be surprised to see him getting excited about weird Japanese imports, low-rider VWs out of Germany, replicas from Russia or LS swaps down in Florida.
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