SHANGHAI -- Volkswagen will cut costs in China by 40 percent and doesn't plan additional investment in its two local auto-making ventures before 2008, an executive said, as it tries to halt a slide in its market share in the world's third-largest auto market.
The Beijing-based executive confirmed media reports of the cost cutting scheme and said the firm did not plan additional investments beyond its already-committed projects.
"We've decided not to build up more capacity for the time being," he told Reuters. The move is part of a restructuring program to maintain its market position, Volkswagen said in a statement, as competition from General Motors and other automakers erodes its sales.
The European automaker's share in China has shrunk to 18 percent from a quarter at the end of last year.
Globally, chief executive Bernd Pischetsrieder had already set a target of achieving 1 billion euros ($1.20 billion) in material cost savings alone in 2006.