Volkswagen opens China factory with 300,000 unit annual capacity

BEIJING (Bloomberg) -- Volkswagen Group opened a new factory today in the southern Chinese province of Guangdong as it seeks to overtake Toyota to become the industry's biggest company by deliveries.

The plant will build the seventh generation of the company's best-selling compact Golf model.

The plant, set up with Chinese partner FAW CAR Co. in the city of Foshan, has an initial capacity to produce 300,000 units a year, Volkswagen said in a statement. The factory will create 6,500 jobs in this first phase, VW said.

Capacity will double in the factory's second phase, the company said.

Production boost

In March, the carmaker said it planned to increase its production in China 60 percent by 2018. The company's sales in China surged by almost half last year and boosted its share of the country's passenger vehicle market this year by 3 percentage points to 22 percent by the end of August.

Volkswagen delivered 2.05 million vehicles in China during the first eight months, 18 percent more than a year earlier, the company said. The carmaker announced in April that it plans to expand its model lineup in China by 29 percent by 2015. Volkswagen aims to offer 90 cars, SUVs, vans and heavy trucks in the world's biggest vehicle market compared with about 70 models now.

The group is targeting at least 3 million deliveries in China this year, Jochem Heizmann, head of the carmaker's Chinese operations, said in April.

China, already VW's biggest national market, may expand to account for 37 percent of the German carmaker's global volume in 2015 from 28 percent in 2010, according to LMC Automotive research company.

VW's $13.2 billion project to build factories and develop models in China by 2018 will be the country's largest-ever automotive investment program, CEO Martin Winterkorn said in April. The company will expand its workforce by 33 percent to more than 100,000 employees in the period, according to the carmaker.

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