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Volkswagen to construct new plant in Southern China - Web Exclusive

Jun 10, 2010

• Planned capacity of Foshan plant: 300,000 vehicles per year

Epcp_1006_01_o+volkswagen_to_construct_china_plant+ceremony Photo 2/2   |   Volkswagen to construct new plant in Southern China - Web Exclusive

• Key contribution to long-term growth strategy in China

• Volkswagen CEO Winterkorn: "By 2013/2014, we intend to double our capacities in China to three million vehicles per year."

Wolfsburg / Foshan, June 9, 2010 – The Volkswagen Group is expanding its production capacities in China. Contracts for the construction of a new Volkswagen plant at Foshan, in the Southern Chinese region of Guangdong, were signed today by Prof. Dr. Martin Winterkorn, Chairman of the Management Board of Volkswagen Aktiengesellschaft, and Dr. Winfried Vahland, President and CEO of Volkswagen Group China, together with representatives of the partner FAW-Volkswagen in Foshan. "China has become the Volkswagen Group's largest and most important sales market. We intend to continue above-average growth side by side with our partners. With our unprecedented investment program, we intend to double our capacities in China to three million vehicles per year by 2013/14," said Winterkorn on the occasion of the signature.

The new plant at Foshan is part of the Volkswagen Group's long-term growth strategy. The Group plans to expand its leading position on the Chinese market and to adapt capacities to growing demand from customers. For this purpose, 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," Vahland added. "The tenth plant in China will further reinforce the leading market position of the Volkswagen Group."

Current plans are for production at the new Foshan plant, near the metropolis of Guangzhou, to start in mid-2013. A complete production facility with press shop, body shop, paint shop and assembly unit is to be constructed on a site with an area of 170 hectares. The maximum annual production capacity will be 300,000 units. Construction work is to start at the end of 2010 and the new plant will have a workforce of about 4,000 employees by 2013. The investment of about 520 million euros is to be funded from the cash flow of FAW-Volkswagen.

Together with its partners FAW-Volkswagen and Shanghai Volkswagen, the Volkswagen Group has a total of nine plants in China, where it already produces about 20 Volkswagen, Škoda and Audi models. In addition to the existing production plants in Changchun and Chengdu, the new plant at Foshan will be the sixth facility of FAW-Volkswagen in China and the first in Southern China.

In April 2010, the Volkswagen Group added a further 1.6 billion euros to its current investment program for China, bringing the total to six billion euros. This year alone, the 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. The production of electric cars is also set to start in China in 2013/2014.

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