VW Plans to Boost Production in China to Makeup for the Loss in Europe image

VW will increase production in China and other emerging markets, to make up for the drop in demand in its home market.

In 2012 VW’s operating profit dropped 4.1% to 3.64 billion euro ($4.7 billion), according to the company’s report. VW sales in Germany also fell 9.4% during the first two months of 2013, a clear sign that the automaker cannot handle anymore the flagging European economy.

“We have to really put our shoulders to the wheel and give our very best,” Chief Executive Martin Winterkorn said at VW’s base in Wolfsburg. “The environment is definitely a tough challenge, especially for European car makers.”

VW also plans to build a new plant in China, adding 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, 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.

“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.”