7.44 AM Wednesday, 17 April 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:35 05:51 12:21 15:49 18:46 20:03
17 April 2024

Volkswagen plans to delay China plant expansion

Volkwagen's sales in China, the world's second largest auto market, has plummeted due to decreasing demand. (AP)

By Reuters
Volkswagen AG plans to postpone expanding a plant in southwest China by a year as a slowing economy curbs automobile demand in the country, the Oriental Morning Post reported on Wednesday.

FAW Volkswagen, the European firm's venture with FAW Group, one of the three biggest automakers in China, has postponed an additional 200,000 annual capacity to a plant in the city of Chengdu to 2011, the newspaper said, citing unnamed sources.

The new assembly line was previously scheduled to start operating in 2010, making Jetta and Sagitar sedans, it added.

Volkswagen's China spokesman said he had no information on the matter currently, while FAW Volkswagen executives could not be immediately reached.

FAW Volkswagen set up the Chengdu plant in July 2007 with an initial capacity of 150,000 units. The facility plans to have a total capacity of 350,000 units eventually, the report added.

Car sales growth in China, the world's second-largest auto market slowed to a single-digit rate in 2008 for the first time in at least 10 years as consumer confidence waned with a slowing economy.

All major foreign automakers operating in the country have reported slower growth in China last year.

Sales of Volkswagen in mainland China, Hong Kong and Macau increased 12.5 per cent to 1.02 million vehicles in 2008, down from 28 per cent growth in the previous year.

General Motors' sales in the country rose 6.1 per cent to 1.09 million vehicles last year, down sharply from 18.5 per cent growth in 2007.