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VW Expected to Build New Chinese Car Plant
Volkswagen AG will sign an agreement on Monday 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 will sign an agreement on Monday to erect an assembly plant in Urumqi, China, with joint venture partner Shanghai Automotive Industry Corp., according to news reports.
Those reports say the 2 billion-yuan ($316 million) factory would open in 2013 with annual capacity of 50,000 vehicles. The investment would be part of VW's plan to spend €14 billion ($18.3 billion) on new products and plants in China by 2015.
VW says opening a factory in the far northwestern province of Xinjiang is part of its strategy to expand into the country's less-developed interior. But analysts note that Xinjiang is riven by ethnic tension between Muslim minority Uighurs and Han Chinese residents that has resulted in the deaths of more than 200 people since 2009.
Separately, Reuters says VW and China also will sign a contract on Monday to extend the company'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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