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VW Opens New Factory in Western China

September 04, 2013

The Volkswagen Group and the Shanghai-Volkswagen joint venture started a semi-knocked down (SKD) vehicle assembly in Urumqi, the Group’s 102nd plant worldwide. Volkswagen is thus underscoring its position as a pioneer on the Chinese automotive market, becoming the first carmaker with a vehicle plant in the Xinjiang region, according to the automaker. In Western China in particular, the Group is expecting a strong rise in purchasing power over the coming years.

Production at the Urumqi plant gets underway with the SKD (semi-knocked down) assembly of the Volkswagen Santana. With the planned start of the plant’s own paint shop and body shop, the factory will produce up to 50,000 vehicles per year from 2014.

In developing the west of the country the Volkswagen Group is strengthening its position in China over the long term, because this is the region where particularly strong growth in gross domestic product, and therefore purchasing power, is expected over the coming years, the automaker noted. There is today already a clear trend westward, while growth momentum in the east of the country has to some extent returned to normal. Volkswagen has taken this trend into consideration by building the production plant in Urumqi.

Shanghai-Volkswagen currently operates a total of three vehicle plants in Shanghai, Nanjing and Yizheng, which is located in Jiangsu province. A further plant in Changsha in the southern part of Central China is to be completed by the end of 2015.

According to the automaker, China is the Volkswagen Group’s largest automotive market. The Group has already been producing in the People’s Republic of China for 30 years. In 2012, the company delivered more than 2.81 million vehicles to customers in the country. In the first seven months of this year, deliveries rose by 18.5 percent compared with the comparable prior-year period to 1.79 million vehicles. The Group is building five further plants in China this year and over the next few years. By 2018, the number of employees will have increased from the present 75,000 to 100,000, and annual production capacity will have risen from 2.6 million to over four million.

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