Volkswagen is expanding their operations in China by a great deal by building a new assembly plant in the country.

Raised eyebrows

The city of Xinjiang is the chosen location for Europe’s largest car manufacturer. The decision did raise a few eyebrows as the area is quite deprived. It isn’t necessarily a booming place for automotive production. Could this in a very strange way be the attraction to Volkswagen? Placing a factory in areas which have deprived and are not very well funded such as Xinjiang would boost the local economy in China. Naturally this would help raise the profile of the company throughout the country which is a brilliant in direct method of marketing.

Export base

The exact location of Xinjiang borders Russia, Mongolia, Kazakhstan, Tajikistan, Pakistan, Kyrgyzstan and Afghanistan. That in itself falls in accordance to Volkswagen’s future plans of expanding in such countries in the future. Exportation would be a lot easier if that is to be the case in years to come. If the city was to be an export base, it could be a stroke of genius.

There as a matter of fact great potential in these countries. Kyrgyzstan has 220,000 vehicles on the road with many of them being exports. What better car to have exported than Volkswagen some may argue?

Better business in China

Apart from the reasoning behind why Volkswagen decided to place a factory where they did, the company’s operations are currently experienced great levels of demand, growth and profit justifying a reason for another factory to be built in the country.

Experts have said that the Shanghai Volkswagen division would have found it difficult to simply expand their operations in China, creating the need to create an assembly plant somewhere else in the country.

When built this would be the 10th factory to be built in the country. At present the company are in partnership with Automobile Works (FAW) in China. Their prospering partnership has allowed the new factory to develop. Overall Volkswagen believes that they can produce over 2 million cars in China alone.

Volkswagen are makes huge strides in China. There could be no better place to grow and prosper as the Chinese automotive markets are the world’s number one.