As Volkswagen stays committed to expand its production facilities throughout China, the automaker and its joint venture partner will begin construction for a new plant in Tianjin next week.
The Chinese auto market is slowing down, but not so steeply as to scare the automakers from making further investments. The country still offers solid growth opportunities and its passenger-vehicle market has been proved to be one of Volkswagen’s strongest lately, as the Group’s core brand posted a 6.5 percent rise in China for the first quarter of the year, while the results on other major markets were almost all negative. The German automaker has a total of 20 production locations in China and in 2015, it opened a vehicle plant in Changsha and a new engine line in Changchun.
Volkswagen already announced it plans to build two more car factories, in Qingdao and Tianjin, by 2018. And now, alongside with its First Automotive Works Group joint-partner, VW is getting ready to break ground on the Tianjin one, a spokesman for the company confirmed this week Tuesday. He also revealed the automaker targets an annual output capacity of five million vehicles by 2020.
Even if the total investment has not been yet officially disclosed, the company previously said it aimed to spend 4.4 billion euros (5 billion dollars) for its operations in China in 2016. According to the state-owned newspaper China Daily, which cited an FAW-VW official, the investment in Tianjin was worth 19.5 billion yuan (3 billion dollars), for a plant that has the capacity to make 300,000 cars annually. Besides FAW, Volkswagen also makes cars in China through a separate joint venture with SAIC Motor.