Volkswagen Expands Footprint in Chinese Market

FAW-Volkswagen announced the opening of a new production base in Qingdao， east Chinas Shandong Province， on May 28， marking an expansion of the leading European automaker in the worlds biggest auto market.

FAW-Volkswagen Automotive Co. Ltd.， a joint venture between Chinas FAW Group and the German Volkswagen Group， said the 1.1-million-square-meter base has a total capacity of producing 300，000 vehicles every year. Construction of the base began in July 2015， with investments totaling approximately 10 billion yuan （$1.58 billion）. The joint venture now has a total of fi ve production bases.

Liu Yigong， FAW-Volkswagen General Manager， said the new base in Qingdao will bring 5 billion yuan （$777 million） in investment from the companys suppliers. It will also create 3，000 jobs locally， while its suppli- ers will create up to 10，000 more jobs.

Volkswagen set up its fi rst joint venture in Shanghai in 1985 with SAIC Motor. As the Chinese economy developed and opened up， the company established a strong foothold in the Chinese auto market and has been expanding its footprint ever since. It now has three ventures following the establishment of a second one with FAW in Changchun， northeast Chinas Jilin Province， in 1991， and a third with Anhui Jianghuai Automobile Co. Ltd. in Hefei， east Chinas Anhui Province， in 2017.

In addition to expanding production and introducing new techniques， Volkswagen has also focused on developing new energy vehicles and intelligent driving. The company and its joint-venture partners announced in April that they will invest 15 billion euros（$18.3 billion） in developing new energy and self-driving vehicles by 2020. It also plans to roll out 15 new car models in China by 2020 and launch 40 new energy vehicle models for the Chinese market by the end of 2025.

“As the worlds biggest automotive market， China plays a prominent role across all group brands. The strong bond with our joint ventures and business partners will remain，”said Herbert Diess， CEO of Volkswagen， in April. The company will start local production of battery-electric cars in at least six factories by 2021 in China， he added.

Volkswagen has seen high-speed growth in the Chinese market over the past few years. In 2017， it delivered 4.18 million vehicles to the Chinese mainland and Hong Kong market， up 5.1 percent year on year.