Volkswagen to decide south China plant plan in 2010 image

Volkswagen will be sure whether to build a new plant in south China in 2010 or not, said Dr. Winfried Vahland, head of Volkswagen Group China, adding that the world-known carmaker’s decision depends on China’s auto sales growth.

According to the latest development strategy, the group will spare no effort to lift its annual sales volume in six southern Chinese provinces and territories, including Guangdong, Guangxi, Jiangxi, Zhejiang, Fujian, and Yunnan, to 500,000 from 150,000 vehicles.

But most insiders doubt how Volkswagen can achieve such a robust expansion of more than 3 times, without a new factory in south China.

At the 7th China (Guangzhou) International Automobile Exhibition (Auto Guangzhou 2009), Winfried Vahland interviewed with the journalists and revealed that Volkswagen’s south China plant construction scheme was still in suspense.

The automobile tycoon is believed to hit its production capacity goal of 2 million cars in China by 2018, on the strength of its existing four production bases in Shanghai, Changchun, Nanjing, and Chengdu, respectively. However, Volkswagen needs to consider the building of a new factory in south China as soon as its output and sales target is elevated temporarily.

Volkswagen has been reported to introduce a Spanish sports car brand, the Seat, into China, since the mid 2008. Domestic media even said that Volkswagen Group China had invited several Audi distributors to visit the Seat factory in Spain and asked for their opinion.

However, the German automaker has not made the final decision yet, in spite of its preliminary feasibility study and southern Chinese consumers’ interest in this car model, Winfried Vahland said frankly. For the sake of a stable performance, Volkswagen should be in view of the risk caused by such an explosive auto sales growth in China.

An analyst pointed out the introduction of the Seat was likely related to Volkswagen’s 2018 development strategy, so its establishment of a new plant in south China should be a signal for the debut of the Seat.

About one month ago, the auto giant declared its plan to create the second DSG (direct shift gearbox) plant in Dalian, Liaoning Province, northeast China, before 2012, and then its annual DSG output will be enlarged to over 500,000 units.

It is said to introduce some Chinese investors, including China FAW Group Corporation and Shanghai Automotive Industry Corporation (Group) (SAIC), into the possible construction, and related parties are discussing about the detailed scheme now.