Volkswagen Group signs contract with SAIC Motor Corporation for new Urumqi plant and letter of intent with FAW to extend partnership by a further 25 years
Volkswagen Group and their Chinese partner, SAIC Motor Corporation has signed a contract to build a new vehicle manufacturing plant in Urumqi, the capital of Xinjiang province Western China. VW Group and China First Automobile Group Corp (FAW) are also in agreement in extending the FAW-Volkswagen JV by another 25 years.
The new Uruqmi plant will see an approximate investment of € 170 Mio. 2015 onwards, the new plant will produce 50,000 vehicles a year. Alongside, VW will aid automotive suppliers settle in close proximity, and they would set up a training center.
This aside, VW and reps from FAW signed a letter of intent in regards to an early extension of the FAW-Volkswagen JV set up in 1991 by a further 25 years. The JV encompasses vehicle and component plants in Changchun, Chengdu and Dalian. A successful cooperation through 20 long years is the stepping stone to their future alliance that will look into expansion, electro-mobility and new innovative product development projects, and financial services sector.
Press Release: Volkswagen Group plans expansion of commitment in China
Chinese Premier Wen and Federal Chancellor Merkel visit Volkswagen plant in Wolfsburg
Contract to build a new plant in Urumqi and letter of intent to extend partnership with FAW
The Chinese Premier Wen Jiabao and the Federal Chancellor Dr. Angela Merkel today visited the Volkswagen plant in Wolfsburg. In the presence of the two heads of government, Prof. Dr. Martin Winterkorn, CEO of Volkswagen Aktiengesellschaft, and representatives of the Chinese partner SAIC Motor Corporation signed a contract to build a new plant in Urumqi, Western China. Furthermore, the Volkswagen Group and China First Automobile Group Corp (FAW) agreed on plans to extend the FAW-Volkswagen joint venture by a further 25 years.
“A 30-year success story unites Volkswagen and China. As a pioneer of the Chinese automotive industry we gave important momentum to China’s industrial development and to German-Sino economic relations. Together with our partners we will now carry this pioneering spirit into Western China as well”, Winterkorn said on the occasion of the visit to Wolfsburg.
Volkswagen and SAIC Motor Corporation of Shanghai agreed to build a vehicle manufacturing plant in Urumqi, the capital of Xinjiang province. A total of approx. € 170 Mio will be invested in the new plant. From 2015 this plant will produce up to 50,000 vehicles per year. In parallel, Volkswagen will help automotive suppliers to settle in the vicinity and will be setting up its own training center. “Going forward, we expect strong growth in China’s rural regions. The west of the country plays a special role in this context. Together with its partners, Volkswagen is looking to extend its presence there in the long term”, Dr. Karl-Thomas Neumann, President and CEO of Volkswagen Group China (VGC), said. “Our ‘go west’ strategy marks the beginning of a further chapter in our success story in China”, Neumann added.
Furthermore, Winterkorn and representatives of the partner FAW signed a letter of intent regarding the early extension of the FAW-Volkswagen joint venture by a further 25 years. The joint venture was set up in 1991 and today operates vehicle and component plants in Changchun, Chengdu and Dalian. Following more than 20 years of successful cooperation, Volkswagen and FAW intend to further expand their strategic partnership going forward, and will be concentrating in particular on projects concerning electro-mobility and new, innovative product developments and services in the financial services sector.
Federal Chancellor Dr. Angela Merkel and the high-ranking Chinese delegation comprising Premier Wen Jiabao and numerous ministers were welcomed to the Wolfsburg plant by Prof. Dr. Martin Winterkorn and Prof. Dr. Ferdinand Piëch, Chairman of the Supervisory Board of Volkswagen Aktiengesellschaft.
The visitors entered their names in the guest book and attended the ceremony to mark the signing of the contract and the letter of intent, and were then introduced to some of the Volkswagen Group’s forward-looking vehicle concepts, which were presented by Winterkorn. The guests were especially impressed by current developments in electro-mobility, particularly the Golf Blue-e-Motion.
The People’s Republic of China is the Volkswagen Group’s largest sales market. Volkswagen sold 2.26 million vehicles in China in 2011, with deliveries increasing by 15.6 percent to over 633,000 units in the first three months of this year. The two joint ventures Shanghai-Volkswagen and FAW-Volkswagen with a total workforce of some 50,000 produce vehicles, gearboxes, chassis and engines at ten plants. The Group intends to continue on this successful course in future: The two Chinese joint ventures will be significantly expanding their commitment, investing a total of €14 billion by 2016. The focus will lie on developing new products and expanding environmentally-friendly production capacity.