Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
A Volkswagen Caddy/FILE

Finance

Volkswagen to build two new plants in China

A Volkswagen Caddy/FILE

A Volkswagen Caddy/FILE

BEIJING, Jul 7 – German carmaker Volkswagen will build two new vehicle plants in China as it invests two billion euros ($2.7 billion) along with its partner, it announced Monday during a visit by Chancellor Angela Merkel.

The agreement between the company and Chinese auto manufacturer FAW for the new factories in the world’s biggest car market was signed in the presence of Merkel and Chinese Premier Li Keqiang, Volkswagen said in a statement.

The two firms will together spend around two billion euros to expand production capacity, VW said.

It was not clear what the cost of the new factories — in the northern port city of Tianjin and Qingdao in the east — would be, or how the investment would be apportioned.

The statement also did not specify what the plants’ annual capacity would be or when they were expected to start production.

VW representatives were not able to provide further details when contacted by AFP.

“With these investments, Volkswagen is clearly expressing its commitment to the Chinese market,” Jochem Heizmann, president and chief executive officer of Volkswagen Group China, said in the statement.

The sites were selected due to their “high qualification levels and the infrastructure available”, the statement added.

Merkel is on a three-day visit to China — her seventh since 2005 — with economic ties topping the agenda and a high-powered business delegation in tow.

She toured a Volkswagen factory in the southwestern city of Chengdu on Sunday.

She is being accompanied by executives from Siemens, Airbus, Lufthansa and Deutsche Bank among other companies, according to German media.

Advertisement. Scroll to continue reading.

For the EU’s biggest economy, China is a crucial mass market. Chinese companies want its technology and millions of newly prosperous citizens crave German goods ranging from Audi sedans to luxury home appliances.

Germany last year sold goods worth 67 billion euros to China, its number-two export market outside Europe after the United States. Imports from the Asian powerhouse, meanwhile, topped 73 billion euros.

China has become Volkswagen’s largest and most important market, according to the company.

The group sold more than 1.5 million vehicles in the country in the first five months of this year, including sales by its two joint ventures FAW Volkswagen and Shanghai-Volkswagen, the statement said, up 17.7 percent from the same period in 2013.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Headlines

NAIROBI, Kenya, Mar 16 – The World Bank has given the Kenyan government USD 60 Million (Sh6.1 billion) to help combat the deadly coronavirus pandemic...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Coronavirus

NAIROBI, Kenya, Mar 25 Kenyans who will fail to pay their dues by April 1 will not be listed in the Credit Reference Bureau...

Headlines

NAIROBI, Kenya, Mar 13 – Meet Kennedy Okaka, the CEO of PH Africa which manufacturers and distributes hand sanitizers. Okaka speaks to Capital Business...