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VW Expected to Build Fifth Chinese Car Plant
Volkswagen AG is expected on Monday to announce a deal to erect an assembly plant in Urumqi, China, with joint venture partner Shanghai Automotive Industry Corp., according to news reports.
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Volkswagen AG is expected on Monday to announce a deal to erect an assembly plant in Urumqi, China, with joint venture partner Shanghai Automotive Industry Corp., according to news reports.
CEO Martin Winterkorn is expected to sign the accord when German Chancellor Angela Merkel and Chinese Premier Wen Jiabao visit VW headquarters.
Reports say the 2 billion-yuan (€242 million) factory is scheduled to open in 2013 with annual capacity of 50,000 vehicles. The investment would be part of VW's plan to spend €14 billion on new products and plants in China by 2015.
VW would be the first foreign automaker to open a plant in far northwestern China. Winterkorn reportedly said during a visit there last week that the facility would be part of VW's strategy to expand into the country's less-developed interior. Analysts note that location is the center of ethnic violence between minority Uighurs and Han Chinese, which could threaten plant operations.
Separately, Reuters says Winterkorn and Jiabao also will sign a contract to extend VW's agreement with its other Chinese joint venture partner, FAW Group Corp., by 25 years. That agreement was set to expire in 2016.
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