VW announced it had started construction of a new plant in Changsha, China, part of its strategy to boost production in the world’s largest auto market.
The plant in Changsha, China will have an annual capacity of 300,000 units and it is expected to be completed by the end of 2015.
“We are expanding our capacity in China to 4 million vehicles per year by 2018 in order to meet demand from our Chinese customers,” Jochem Heizmann, head of Volkswagen’s operations in China, said in the statement.
VW previously said it had no plans to build a plant in Changsha, but it seems the automaker changed its mind, and so the new facility will be the seventh plant built by the German automaker as part of the investment worth 9.8 billion euro made in China. Analysts predict that new-vehicle sales in China will surpass 20 million units by the end of this year.
VW will increase production in China and other emerging markets, to make up for the drop in demand in its home market. This year VW will start production at two component facilities and three new assembly plants, planning to almost double capacity in the Asian country to more than 4 million units by 2018, the same year the company plans to take the global sales crown from Toyota.