China: Volkswagen inaugurates a new assembly facility image

Even as the sales of the German automaker in the world’s largest auto market have started to see a cool down recently, the group is actively pursuing an increase in its production quota there, with a new factory in Changsha recently opened.

Volkswagen AG, the second largest automaker in the world and the biggest in Europe, is counting on China to bring the necessary sales increase in order to take over the first place from Japan’s Toyota Motor. But the situation in China is no longer stellar – with sales slowing down from the double-digit jumps seen in previous years. Volkswagen and SAIC Motor have opened through their 50-50 joint venture, Shanghai Volkswagen Automotive, the new 1.2 billion yuan ($194 million) plant, which has an annual production capacity of 300,000 units for the VW and Skoda brands, once it reaches optimal capacity. “The plant in Changsha is a key step in our Go South strategy in China. This new facility will bring us nearer to our Chinese customers and also improve the quality of our supply chain,” commented Jochem Heizmann, the chief of VW China, in a release.

Changsha will first produce the VW Lavida compact sedan, with the factory set around 900 km west of Shanghai then building other VW and Skoda models. The facility has around 4,000 workers, with VW AG still adding capacity even as sales are almost creeping to a halt this year. After the first four months of the year, the group sold 1.19 million autos in China, just 0.2 percent more than during the same period last year.

Via Automotive News Europe