FRANKFURT -- Volkswagen will launch new models at both of its Chinese joint ventures in the coming years that will include smaller, cheaper cars, the outgoing head of its China business was quoted as saying.
"The largest amount, roughly 70 percent, of our investments will go to new products," Bernd Leissner told German business daily Handelsblatt in an interview published on Wednesday.
He added that lower-segment cars would roll out in the future to expand its product range and more effectively compete with cheaper rival models like the Chery QQ and the Chevrolet Matiz.
Unit sales in China, Volkswagen's most important foreign market, have slumped this year and the carmaker looks set to lose its leading role in the country in 2005 after having dominated the market for years.
Skoda executive Winfried Vahland, who will succeed Leissner in June, has been given just two years to restructure the group's operations there, the paper reported.
"It is imperative that we cut costs," Leissner said.
Despite a 17 million euro ($21.84 million) pro-rata operating loss in China during the first quarter, Volkswagen aims to break even in China this year.
Its market share in China totals just 19 percent, the paper reported, after car sales dropped by a third. It did not give a time period to which the figures referred.