Volkswagen to build new factory in China image

Volkwagen AG, Europe’s largest automaker plans to build a new facility in China, somewhere in the Xingjiang province, Reuters reports.

Volkwagen said the new factory will help the automaker to meet the growing demand, in a market that is expected to grow even further.

‘Due to the continued growth of the Chinese automobile market, we are always examining market opportunities, including in western China. Regarding this proposition, we still have not made a decision.’

The automaker said production could begin as early as 2013, with the annual capacity reaching 50,000 automobiles by 2016. However, until this moment no decision has been made on the project.

‘Shanghai Volkswagen already has two automobile factories and two component factories in the Shanghai region. Another additional factory is being constructed,’ Volkswagen said in a statement.

The Xinjiang Region Development and Reform Commission stated that the new site will help fill the gap in the region’s automobile production capability, and will aid in the country’s plans to expand exports to Central Asia and the Middle East. Xinjiang holds a distinct geographical advantage, with the western town of Khorgas neighboring Kazakhstan. 5,128 vehicles were exported from the town last year, generating $2 billion worth of revenue.