Volkswagen wants to expand in China

Volkswagen AG

Volkswagen AG

While most of carmakers are experiencing difficulties, Volkswagen AG is ready to invest hefty sums to expand and build plants outside its European market. According to its latest statements, Volkswagen AG aims to double (sic!) its output capacity in the world’s second economy in the next five years. The Europe’s biggest carmaker just wants to take advantage of upcoming opportunities and grab a bigger market share in emerging markets to offset weak results recorded in the Old Continent.

Expansion in China & elsewhere

On the 14th of March, Volkswagen AG informed that it would target the capacity of roughly 4 million cars in China by the year of 2018. Certainly, the plan is ambitious especially when we look at the results achieved by the carmaker in 2012 when it delivered approximately 9.1 million units. And it is not surprising that Volkswagen is simply eyeing the global sales crown which these days belongs to Toyota Motor Corp.

As a matter of fact, Volkswagen knows that he has to focus on emerging markets if it wants to be No. 1 carmaker. Martin Winterkorn, chief executive officer, underlined: “VW’s future is increasingly being decided in China, Russia, India, the Americas and Southeast Asia,” adding that these markets would be main sources of future growth.

According to details, Volkswagen AG aims to boost production in China by as much as astonishing 60 percent in 2018. A new car factory in China will produce approximately 300,000 vehicles per year as it was underlined in a statement. The German carmaker expects that it will open its new car plant in China in 2016. Therefore production capacity is expected to climb to astonishing 4 million vehicles per year by 2018. As of yet, Volkswagen AG’ production capacity in China amounts to around 2,5 million as the carmaker has 12 car plants there.

But the car plant in China is not the only one in plans of Volkswagen AG as the carmaker is also thinking about building other factories in China, not to mention the US and other regions. Martin Winterkorn, chief executive officer at Volkswagen AG, underlined: “We will be building a minimum of 10 additional plants in the coming years — of which seven will be in China alone.”

A car plant, which is to be built in the US, will construct a full-size SUV and as it was underlined, the model would be designed specifically for the market!

It is not surprising that carmakers are shifting their focus from Europe to other markets as European countries are struggling amid tough economic conditions. Therefore also Volkswagen AG has decided to expand in China.

Dominance in the market

It is nothing new that carmakers launch models developed specifically for particular markets. And Volkswagen is not any exception. Christian Klingler, sales chief at Volkswagen AG, informed that the carmaker might release up to five cars designed specifically for the US market.

Volkswagen AG is doing whatever it takes to get the title of the No. 1 carmaker. He has recently informed about the production version of the new electric vehicle which is to have its big introduction at Frankfurt Motor Show. New vehicles and new car plants are aimed at giving Volkswagen AG the dominance in the market.

Aubrey Chang
Aubrey Chang, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

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