Manufacturing News

VW opens plant in Xinjiang region as part of western expansion

Shanghai Volkswagen Automotive Co. has opened an assembly plant in Urumqi in northwestern China's Xinjiang region, part of the company's campaign to penetrate China's fast-growing western provinces.

The plant, which builds vehicles from semi-knockdown kits shipped from Volkswagen plants in coastal China, is the first auto assembly plant in the remote region.

The plant has started assembling its first product, the Volkswagen Santana. VW says it will build as many as 50,000 vehicles a year starting in 2014.

China's vast landlocked central and western regions are catching up with the coastal areas in economic growth. Automakers are moving inland to tap the huge demand for vehicles in these regions.

"Our vehicle plant in Urumqi provides sustainable impetus for economic and social development in the region and allows us to benefit from expected growth in western China," said Jochem Heizmann, CEO of Volkswagen Group China.

Shanghai Volkswagen is a joint venture between SAIC Motor Corp. and Volkswagen AG.

Shanghai Volkswagen operates three vehicle plants in Shanghai, Nanjing and Yizheng in coastal China, and it is constructing an assembly plant in the central China city of Changsha.

In China, VW also has a joint venture with China FAW Group Corp. That partnership operates three assembly plants, with a fourth due to start production this month.

In the first seven months of this year, the VW delivered 1.8 million vehicles in China, up 19 percent. VW plans to increase annual production in China to more than 4 million vehicles by 2018, up from 2.6 million units this year.

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