Volkswagen steps up southern China push with Guangdong expansion
FOSHAN, China (REUTERS) - Volkswagen AG is expected to announce plans to significantly boost the capacity of a key plant in southern China as Europe's No.1 carmaker ramps up efforts to grab more market share in a region dominated by Japanese rivals.
On Wednesday, Volkswagen will officially open a plant in Foshan city in southern Guangdong province which it operates under a venture with state-owned automotive enterprise FAW Group Corp. The plant, capable of producing 300,000 vehicles a year, recently started to manufacture the redesigned Volkswagen Golf car.
Volkswagen, which also sells the Audi, Skoda, Lamborghini and Bentley brands in China, is expected to unveil on Wednesday details of a plan to double the capacity of the Foshan plant, sources familiar with the matter told Reuters. The plant is also slated to start producing the Audi A3 hatchback in early 2014, the sources said.
The planned expansion stems from an agreement signed in May by the two companies, which aim to boost the plant's capacity to 600,000 vehicles a year with an investment of 15.3 billion yuan (S$2.05 billion).