Volkswagen Group is currently evaluating with their Chinese partner First Auto Works whether they need to add a domestic brand to enter the low-cost portion of the Chinese market. VW’s deliberations come as a number of international automakers are adding joint-venture brands. In recent months, General Motors, Nissan and Honda have created such brands. The central government wants international automakers to create those brands so their Chinese partners can gain expertise and technology.
Whether or not it adds a new brand, VW plans to double production capacity by 2018, to about 4 million units a year. It is building two assembly plants in China and will expand production at its seven existing plants. The new plants will start with annual capacity of 300,000 each, but are designed to easily expand to 600,000. Last year, VW’s six brands in China sold 1.9 million units, up 37 percent from 2009. This year, VW’s China sales could total 2 million units.
