The VW Group in China Expands

Press Release

The VW Group in China Expands

• Annual capacities to be doubled by 2007
• Foundation stone laid for new factory in Changchun
• Launch of the Golf

As part of its strategy for growth, the Volkswagen Group will double the annual capacity currently available at its Chinese factories from 800,000 to 1.6 million vehicles over next five years. This means expanding its two joint ventures in Changchun and Shanghai. In addition, new sites are also being examined. On the occasion of the 50th anniversary of the First Automotive Works (FAW), the Chinese joint-venture partner of FAW-Volkswagen, the Chairman of the Board of Management of Volkswagen AG, Dr. Bernd Pischetsrieder, together with the President of FAW, Zhu Yanfeng, today laid the foundation stone for the new FAW-Volkswagen factory in Changchun. The ceremony was attended by the Chairman of the Supervisory Board of Volkswagen AG, Dr. Ferdinand Piëch, and by other personalities from politics and industry. In his address, Pischetsrieder stressed that China is the only market that is currently enjoying booming growth rates and that it is only a matter of time before it overtakes Germany to become the third largest market in the world. FAW-Volkswagen has been so successful that its current production facilities are running at full capacity. Increased capacity is inevitable in order to meet growing future market requirements. Pischetsrieder stated: "Besides the new models, the existing products will also maintain their sales volumes and will remain in production for some years to come. This means that existing capacity will have to be doubled to enable us to expand our product range. The new factory will make this development possible." With an annual capacity of 330,000 vehicles, the new factory is scheduled to be handed over in late 2004 / early 2005. FAW-Volkswagen is investing some 1 billion euro in this project. That afternoon, Piëch and Pischetsrieder attended another ceremony of great importance for Volkswagen's presence on the Chinese market. The company's worldwide volume model, the Golf, was officially launched in China. The vehicle, which will be built in Changchun, will be another milestone in Volkswagen's Chinese success story. A sales volume of around 50,000 vehicles on the Chinese market is planned for 2004. Besides doubling vehicle production capacity at the two joint ventures, FAW-Volkswagen and Shanghai Volkswagen, the VW Group's strategy for growth includes increasing the current production of engines and gearboxes and a further expansion of the product range. This should enable the two joint ventures to each launch one new Chinese-built model a year onto the market. According to current estimates, VW's joint ventures will invest some six billion euro in China over the next five years. The Volkswagen Group will thus have laid the foundations needed to enable it to benefit in the future from the overall market growth and to consolidate its market leadership in China for the long term.