Volkswagen was the first foreign car maker to enter the Chinese car market thirty years ago. They understand that if they are to reach that number one spot by the year 2018 ahead of General Motors, they will have to strengthen their presence in emerging markets like China.
There has been news emerging from the region that Volkswagen are deciding whether to build a new factory in the country. The City of Wuhan is the chosen destination for a new assembly factory to be potentially built. Wuhan is located centrally within the country making it an ideal destination for localised vehicles to be produced, allowing easy distribution across other parts of China.
Apparently talks with the cities Government are at an advanced stage regarding the project. Volkswagen are said to be negotiating the possibility and heavily explaining the benefits to the City.
Officially however Volkswagen has been made unavailable for comment regarding the situation. They have however officially announced that with Chinese partner’s SAIC Motor Corp, a Shanghai based company; Volkswagen will build a new factory in Urumqi. The total cost of that project will hit around 170 million Euros. This particular factory will have an annual production capacity of 50,000 per year by mid decade.
In 2011 Europe’s largest car manufacturer said that they plan to spend 14 billion euros on brand new vehicles and plants all over China in association with their partners in the country. Jochem Heizmann is the man who has been taken on board in order to successfully expand Volkswagen’s presence all over the country. Quite a mammoth task for the individual some would say?
Volkswagen managed to hit the number two spot for worldwide sales last year thanks to brands within their empire such as Audi and Skoda. Sales of the Volkswagen Group in China managed to increase by 17.5 per cent in China alone with figures hitting 1.08 million. Audi are the market leaders within the luxury division in China, fending off BMW and Mercedes-Benz with ease. The Chinese market is the number one market for Audi, ahead of the company’s home country of Germany.
Will Volkswagen manage to expand their presence in China so suddenly? They are one of the foreign brands which are already successful in the country, giving them a major advantage over the likes of General Motors and Ford.