September 11, 2009
FRANKFURT (AP) — German carmaker Volkswagen AG said Friday it wants to spend euro4 billion ($5.8 billion) in China between now and 2011 on new products and plant expansions to keep up with rising demand there.
The company plans to make investments, including increasing capacity, at its Nanjing and Chengdu plants, where it hopes to produce two new models starting in 2012.
The Wolfsburg-based company said the move would be financed through existing cash flow from the region.
"China is the world's most important market for Volkswagen where we have a very wide product pallet," VW chief executive Martin Winterkorn said in a statement.
"The demand for our products is rising so quickly there that our existing capacity can't keep up."
The company said it would see double digit growth in China in 2009 and that it would secure its market leadership there, expecting to double its sales in China — to more than 2 million vehicles, as part of its "Strategy 2018" — sooner than expected.
Shares of VW were more than 4 percent higher at euro127.55 in Frankfurt afternoon trading.