The German automaker Volkswagen is building a plant in southern China to manufacture Seat brand cars, it has been reported.
The plant, which will be VolkswagenÔÇÖs fifth in China, is expected to be built in the city of Guangzhou.
The company, which has a Chinese tie-up with SAIC Motor Corp., already has factories in Shanghai, Nanjing, Changchun and Chengdu. It currently makes Audi, Volkswagen and Skoda brand cars in the country.
The new factory will have an initial capacity of at least 200,000 units.
However, prior to constructing the Guangzhou facility, Volkswagen plans to up capacity in its existing Nanjing and Chengdu plants.
Currently, Wolfsburg, Germany-based Volkswagen has around 10 per cent of the southern China market, and up to 20 per cent of the market nationwide.
The company is currently the biggest foreign carmaker in China and now hopes to ramp up its presence there even further.
In late 2009, the company unveiled a plan to invest Ôé¼4 billion in China until 2011, in order to expand its production capacity and develop its R&D processes.
Volkswagen also said it planned to more than triple its sales in southern China by 2018, in order to deliver on its main strategy to double nationwide sales to two million units within the same timeframe.
In 2009, China overtook the United States as the world's biggest auto market. Over the course of the year, Volkswagen sold 1.4 million cars in mainland China and Hong KongÔÇöup 36.7 per cent from the previous year.
By comparison, VolkswagenÔÇÖs rival General Motors sold 1.83 million vehicles in China last yearÔÇöup 66.9 per cent from a year earlier. This included just over one million cheaper mini vans and pick-up trucks made at its venture in southern China.
Toyota Motor and Honda Motor also have joint ventures in southern China with Guangzhou Auto.
Southern China is an affluent regional market that has thus far been dominated by locally made Japanese cars.
 
 
 
