皇冠体育app

Volkswagen hikes 皇冠体育app investments by 1.6b euros

(Agencies)
Updated: 2010-04-27 09:37

Large Medium Small

Volkswagen AG, Europe's biggest automaker, will build two plants in 皇冠体育app as part of a 1.6 billion euro ($2.2 billion) expansion plan to capture growth in the world's most dynamic auto market.

The German carmaker, which operates in 皇冠体育app through two joint ventures, reiterated its long-term goal to sell 2 million vehicles a year in the world's biggest car market.

"Growth in 皇冠体育app has surpassed all expectations," Chief Executive Martin Winterkorn said in a statement on Monday.

Special Coverage:  Auto 皇冠体育app 2010  Related readings:  Toyota, Nissan, VW hike sales, capacity targets  VW seeks new 皇冠体育app chief as GM, Hyundai crank up competition  VW Group in bid for global No 1 spot  FAW-VW rolls out full lineup

Volkswagen shares were up 1.3 percent at 74.43 euros by 0915 GMT, while the STOXX Europe 600 Automobiles & Parts index .SXAP was 0.5 percent higher.

The 1.6 billion euros brings Volkswagen's total investment plans for the Chinese market to 6 billion euros. Last week, a top manager told Reuters the company had hiked its investment in 皇冠体育app but declined to say by how much.

Volkswagen said it plans to use the money to build two production sites and to launch seven new or revamped models this year in 皇冠体育app.

皇冠体育app is on track to overtake Germany as the group's largest single market this year.

皇冠体育app's car sales zoomed up nearly 50 percent last year, defying falling sales in the rest of the world, thanks in part to a series of government measures designed to stimulate spending during the global downturn.

Overall Chinese auto sales are set to rise faster than expected this year, with some industry insiders now forecasting a 20 percent increase.

Other automakers are also racing to increase capacity as 皇冠体育app's market shows no signs of slowing yet.

Beijing Automotive Industry Holding Corp (BAIC), 皇冠体育app's No 5 automaker, and partner Hyundai Motor, will build their third manufacturing plant in 皇冠体育app, BAIC's President Wang Dazong said at an industry forum last week.

Since VW's Chinese activities are operated through two separate joint ventures with Shanghai Automotive (SAIC) and FAW Group, its earnings there are booked as a share of profit for equity-accounted investments.