Volkswagen invests €927m in new Tianjin transmission plant
Volkswagen is opening a new €927 million transmission factory in Tianjin, China, to produce next-generation DSG gearboxes for the local market.
Volkswagen is building a new transmission factory in Tianjin, China, with an investment of €927 million. The site will manufacture the DQ380 and DQ500 dual-clutch gearboxes, expanding the company’s local component production as Chinese demand for automatic transmissions grows.
The Tianjin facility is Volkswagen’s second transmission plant in China, following the Dalian site in Liaoning province. Production at Tianjin is scheduled to begin by the end of August 2012, according to local authorities. The new plant will focus on the latest generation of direct-shift gearboxes (DSG), which are increasingly specified in Volkswagen Group models built and sold in China.
The decision to build in Tianjin was confirmed by the local economic development committee, which said the plant would be sited in the western part of the Tianjin Economic-Technological Development Area (TEDA). The area already hosts facilities from major automotive suppliers, including Aisin Seiki and Kumho, with other brands such as BYD and FAW also investing in the region.
Focus on DSG production for China
Volkswagen’s Tianjin plant will manufacture the DQ380 and DQ500 DSG transmissions. These dual-clutch units are used in a range of VW Group models, including mid-sized and larger vehicles. The DQ380 is a seven-speed gearbox, while the DQ500 is a more robust version designed for higher torque applications and all-wheel drive layouts.
Volkswagen has faced criticism in China over the reliability of some earlier DSG transmissions, but the company is pressing ahead with local production of its latest designs. The move supports both cost reduction and supply security, as well as meeting localisation requirements for vehicles assembled in China.
What the new plant means for Volkswagen in China
Bringing DSG production to Tianjin reduces the need for imported transmissions and enables Volkswagen to respond more quickly to local market requirements. The factory is expected to create new jobs in the Tianjin area, with recruitment already underway at the time of the announcement.
The Tianjin site joins a growing list of new automotive manufacturing investments in China as global carmakers expand their local operations. The presence of major suppliers and other OEMs in TEDA underlines the region’s status as a key automotive manufacturing hub. For Volkswagen, the new plant is part of a broader strategy to strengthen its position in the Chinese market, which is the company’s largest single-country sales territory.
- Volkswagen’s second transmission plant in China after Dalian
- Production of DQ380 and DQ500 DSG units for local assembly
- Located in TEDA alongside other major automotive suppliers
The Tianjin transmission plant is expected to begin production by the end of August 2012, adding capacity to support Volkswagen’s Chinese vehicle output. The investment reflects the company’s commitment to local manufacturing despite previous technical controversies.
