Volkswagen AG may build a transmission plant in Tianjin, China, a source familiar with the matter told German newspaper Frankfurter Allgemeine Zeitung.
The new facility is part of a plan the German carmaker has to expand capacity in its biggest market.
The new manufacturing plant is expected to start production in 2014 and will cost 300 million euros ($377 million). The facility will create 1,500 jobs, the person said. The source asked not to be named because the carmaker has not yet made an official announcement. A company spokesman declined to comment on the matter.
Volkswagen AG produces more than 20 models in China under its VW, Skoda and Audi brands. The Germany automaker plans to invest 14 billion euros in Chinese production and models by 2016. In 2011, VW sold 2.6 million vehicles in the Asia-Pacific region. Currently, Volkswagen AG runs 11 auto plants in China, with an additional four being under construction.
Volkswagen, which aims to overtake General Motors and Toyota to become the world’s largest carmaker by 2018, is shifting its focus away from western Europe, as auto sales are forecast to drop this year.