Just the Facts:
•VW will invest the equivalent of $2 billion in China to build two new plants.
•The automaker's total new investment in China is now above $8 billion.
•VW aims to boost sales from 150,000 units to 500,000 units in south China within three to five years.


SHANGHAI, China — Volkswagen has announced it will invest the equivalent of $2 billion in China to build two new plants and increase its range of new models to meet growing market demand.

The latest injection is on the top of the $5.8 billion in spending through 2012 it unveiled last year and brings its total new investment in the world's largest auto market above $8 billion.

The new investment is intended to help the German auto giant to maintain its market leadership in China and be a leader in advanced technologies, said Winfried Vahland, president and chief executive officer of Volkswagen Group China.

"We will reach our long-term target of doubling our sales to 2 million vehicles according to plan," he said.

Analysts said that with slack sales in Western markets, the robust Chinese auto market is of growing importance for global automakers. VW is the second-largest global auto maker in China after General Motors. Its first-quarter sales jumped 61 percent to 457,259 vehicles on China's mainland and Hong Kong.

VW's investment, which has been approved by its board of supervisors, is to come from its two China ventures with SAIC Motor and FAW Group.

VW has reportedly been planning to locate two 200,000-unit plants in south China as it aggressively expands in the region. VW aims to boost sales from 150,000 units to 500,000 units in south China within three to five years and to raise its market share to 19 percent from 12 percent in 2008.

A Volkswagen Group China official yesterday declined to comment on possible sites.

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