SINGAPORE -- Volkswagen AG said Thursday that it expected to post a 13 percent jump in cars sold in the Asia-Pacific region this year due to its strong hold in the fast-growing China market.
The company said it would spend around $3.24 billion on regional expansion in the next five years, with the majority of the funds aimed at developing plants and new products in China.
"We aim to hit at least the 700,000 sales mark for the region. It will come mostly from China," Robert Buchelhofer, Volkswagen's chairman for the Asia-Pacific region said.
"Despite the fierce competition we are expecting (in China), we hope to increase market share to close to 50 percent."
Volkswagen has about 40 percent share of the car market in China, but it faces increasing competition from rivals such as Ford Motor Co. and General Motors.
Volkswagen said car sales in China -- its second largest market after Germany -- rose 42.8 percent to 513,000 in 2002 and should hit the 1 million mark by 2007.
China, where the car market has ballooned in recent years due to rising incomes, accounts for more than 80 percent of Volkswagen's Asia-Pacific sales.
Sales in Asia Pacific grew 34.6 percent to about 620,000 cars in 2002, helped in part by a 3.3 percent rise in Japan and a 10.7 percent jump in sales to the Southeast Asian and Pacific regions.
Buchelhofer said the company was keen to make cars in China for export, but costs there remained high as the market was protected before its entry into the World Trade Organization in late 2001.
"The components and parts in China are (still) too expensive to be competitive on a world level in order to export cars," said Buchelhofer.
"We need a restructuring of the auto component industry to arrive at a decent competitive proposition, which we have not reached today."