Volkswagen Group to Build New Factory in Foshan, China

The Volkswagen Group announced on Wednesday plans to expand its production capacities in China with the construction of a new automotive plant in at Foshan, in the Southern Chinese region of Guangdong. The new production facility will have the capacity to assemble 300,000 vehicles annually and will begin operations in mid-2013.

"China has become the Volkswagen Group's largest and most important sales market. We intend to continue above-average growth side by side with our partners. With our unprecedented investment program, we intend to double our capacities in China to three million vehicles per year by 2013/14," said VW boss, Martin Winterkorn.

The German automaker said that a complete production facility with press shop, body shop, paint shop and assembly unit is to be constructed on a 170 hectare site. Construction work is to start at the end of 2010 and the new plant will have an estimated workforce of around 4,000 employees. According to the company, the investment of about €520 million will be funded from the cash flow of FAW-Volkswagen.

Together with its China partners FAW-Volkswagen and Shanghai Volkswagen, the German company has a total of nine plants in China, where it already produces about 20 Volkswagen, Skoda and Audi models.

In addition to the existing plants in Changchun and Chengdu, the new plant at Foshan will be the sixth production facility of FAW-Volkswagen in China and the first in Southern China.

In the first five months of the year, the Volkswagen Group has sold around 778,000 vehicles in China, recording a 48% increase in sales over 2009.