VW plans to invest 9.8 billion euro to expand in the Chinese market in the following three years.
According to VW, part of the money will be used to build a new plant, which will be located in Hunan’s capital of Changsha. Construction is expected to begin in the following two years. The rest of the investment will be used to boost marketing and R&D work for new energy vehicles. VW predicts that by 2018 its annual production capacity in the Asian country will reach 4 million units.
VW CEO Martin Winterkorn said that the automaker is preparing to launch the so-called ‘budget car,’ which is still in the development phase. The vehicle will be priced between 6,000 euro and 7,000 euro, and will target emerging markets, including China, India and Brazil.
The new plant in China will be added to the other 12 engine, component and production plants the automaker already has in the country, which is its biggest market. This year VW will start production at two component facilities and three new assembly plants.
“VW’s future is increasingly being decided in China, Russia, India, the Americas and Southeast Asia,” Winterkorn said. “The relative importance of the markets is shifting.”