Volkswagen to build new factory in Changsa, China image

Volkswagen Ag, Europe’s largest carmaker plans to build a new plant in in the Chinese city of Changsha in Hunan Province, German daily Frankfurter Allgemeine Zeitung reports.

According to the German newspaper, the new facility will have a capacity of 300,000 vehicles / year and will cost 10 billion yuan (1.23 billion euros). That’s about 12 percent from the total of 9.8 billion euros that Volkswagen plans to invest from 2013 to 2015.

Production starts in 2016
Production will start somewhere in 2016 according to the German, and most probably the Chinese partner for the joint venture is likely to be the state carmaker SAIC from Shanghai.

Last month the company said it plans to a budget brand in China with one of its local partners by about 2015, aiming to draw on more than 2,000 dealers and a market share of over 20 percent to take on similar no-frills ventures established by General Motors, Nissan and Honda.

“We need time but we will do it.” The plan is to build a car that will sell for the equivalent of around 6,500 Euros in China.”, R&D boss Dr Ulrich Hackenberg said.
“For the first model we are looking at China, and VW does not export from China,” confirmed Dr Hackenberg.

The Wolfsburg-based 12-brand company produced some 2.6 million cars in China with the help of its two Chinese partners SAIC and FAW.

Volkswagen sold about 770,000 vehicles in China – up 21 percent compared to the first-quarter of 2012.
China may top 20 million units for the first time this year.