If you want to know whether Volkswagen AG will someday become the world's largest automaker, the recent Guangzhou auto show was a good place to look for clues.
Guangzhou, in south China's Guangdong province, sponsors an annual auto show that is widely regarded as less important than rival events in Shanghai and Beijing.
Most global automakers sent second-string deputies to Guangzhou, but Karl-Thomas Neumann, CEO of Volkswagen Group China, made a point of attending.
VW had the largest exhibition space at the show, with separate booths for its Volkswagen, Audi, Skoda and Seat brands. Neumann made a speech at the Volkswagen exhibit, and he took the stage for Skoda and Seat.
Why does Volkswagen take a second-string auto show so seriously? Well, that's because it plans to do two things in Guangdong.
VW plans to build a big assembly plant in Foshan, a city near Guangzhou. That plant will build as many as 300,000 vehicles a year when it starts production in 2013.
Volkswagen also wants to introduce its Seat brand in China, and the Foshan plant -- which will produce cars for Seat, VW and Audi -- will play a key role.
VW Group plans to import some Seat models into China next year, but sales won't really take off until the Foshan site launches production.
Volkswagen has big ambitions to boost sales in south China.
In the first 10 months of 2011, the company sold 1.9 million Volkswagen, Audi and Skoda vehicles in China, accounting for nearly 18 percent of the country's passenger vehicle sales.
But VW is not content with the status quo, and it wants to penetrate Guangdong, where its sales are comparatively weak.
The potential rewards are tantalizing. Guangdong is China's largest regional auto market, generating 25 percent of the nation's car sales.
Moreover, consumers in that region are attuned to foreign brands. Guangdong was the first province opened to foreign trade in China's history. That means consumers in Guangdong might be willing to embrace Seat's sporty compact cars.
Guangdong has long been the stronghold of the Japanese brands. Toyota and Honda have joint ventures in Guangzhou, so VW Group is bound to meet strong competition.
But that's why VW is building an assembly plant in Foshan. The company already has assembly plants in northeast China, east China and southwest China, an extensive geographical reach matched only by Toyota.
By building the Foshan plant, VW will become the only global automaker with production facilities in four Chinese regions.
So the Guangzhou auto show -- supposedly a second-rate event in China -- should not be overlooked. VW's big splash there offers strong evidence of its determination to eclipse General Motors and Toyota.
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