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From strength to strength for FAW Volkswagen

Updated: 2013-01-21 07:57
By Gong Zhengzheng ( China Daily)

From strength to strength for FAW Volkswagen

The FAW Volkswagen Magotan and Sagitar assembly lines in Changchun. Its plan calls for total production capacity to reach 1.8 million units a year by 2015. Wang Haofei / Xinhua

Encouraged by another strong performance last year, FAW Volkswagen Automobile Co, one of the country's largest Sino-foreign car joint ventures, said it will continue to boost sales steadily in the years to 2015.

An Tiecheng, general manager of the partnership between FAW Group Corp and Volkswagen Group, said in an interview last week that it aims to move 1.8 million cars in 2015.

Sales by the joint venture based in the northeastern city of Changchun surged by 28 percent to 1.33 million units last year, said An, helping the company grab 9.5 percent of the entire passenger vehicle market in China, up 1.4 percentage points from 2011.

An said FAW Volkswagen expects its sales to grow 15 percent this year to 1.5 million units.

"China's economic conditions are turning better this year. We will have more production capacity and several new products we launched last year will be given full play in the market this year. We are confident of attaining the sales target," he said.

Last week, construction on the joint venture's manufacturing facility in the southwestern city of Chengdu was completed. It has annual production capacity of 540,000 vehicles.

An said FAW Volkswagen will have a total production capacity of 1.8 million units a year by 2015. Its home base in Changchun will have an annual capacity of 900,000 units. Adding to the total are its new production in Chengdu and a facility in Foshan in the south with a capacity of 360,000 units a year.

FAW Volkswagen now makes the Volkswagen Magotan, Sagitar, Golf, Bora and Jetta as well as the Audi A6, A4 and Q5.

FAW has a 60 percent stake in the joint venture. Volkswagen Group holds 30 percent, while Audi, the premium arm of Volkswagen Group, has 10 percent.

The joint venture will launch a range of new products including the all-new Jetta, the seventh-generation Golf and the Audi Q3 this year.

Hu Yong, deputy general manager of the joint venture for sales and marketing, said the passenger vehicle market in China has entered a period of "rational growth based on a superb base".

He predicted that the market will grow at a pace of 7 or 8 percent annually over the next decade.

Last year, passenger vehicle sales in China rose by 9.3 percent to 13.5 million units, according to industry data.

An added that that FAW Volkswagen will further boost its R&D capabilities to ensure its products meet local customer demands.

The joint venture will have capabilities of developing an entire car in 2015, including chassis, powertrain and electronics, An said.

Last year, the joint venture began operation of the largest in car testing ground in Asia and a car safety center in Changchun.

Juergan Unser, deputy general manger of FAW Volkswagen for product planning, technologies and production, said the joint venture will introduce Volkswagen's platform technologies to develop more products in the coming years.

Dietrich Brassler, deputy general manager and chief financial officer of the joint venture, said the company will continue to expand car financing services to boost sales.

He said the car financing business has huge potential in China as only a quarter of buyers currently use credit in the country, much lower than 70 to 80 percent in Western markets.

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