VW Aims to Boost Output 60% in China

Volkswagen AG plans to increase annual production in China to 4 million vehicles by 2018 from 2.5 million units now.

CEO Martin Winterkorn says VW will open at least 10 additional factories outside Europe in the next several years, including seven in China.

That total includes a new Chinese assembly plant just approved by the company's supervisory board. The facility is scheduled to open in 2016 with initial capacity of 300,000 vehicles. VW offered no additional details.

Winterkorn adds that the company has started development of a new €6,000-€8,000 car specifically for the Chinese market.

VW's sales there jumped 25% to 2.82 million vehicles in 2012. China accounted for €3.7 billion of the company's €11.5 billion in earnings before interest and taxes last year.

The company said last month that EBIT would be flat this year. VW now warns it will lose money in the current quarter because of slumping sales in Europe. The company predicts stronger profit, revenue and vehicle sales in 2014.