Volkswagen Group plans to invest USD4.5 billion in China

China: Volkswagen AG is set to make fresh investments of USD4.5 billion in China as the company is competing with General Motors (GM). The group is in line with its investment plan for new SUVs and plug in hybrid models, to be introduced in China even after the company’s name was derelict due to the emission scandal, recently.

As quoted by Jochem Heizmann, Volkswagen's China chief, the company would introduce domestically produced Audi A6 plug in hybrid car in second half of 2016. The car would be among 15 new-energy efficient vehicles; the company is planning to launch in Chinese market. The annual sale of the company was underpinned in comparison to the sale of General Motors in China ever since 2012.

Volkswagen, sales figure in China fell by 3.4% in 2015, while the Chinese market is considered as a stable source of revenue for the group and rival’s vehicle sale, rose by 5.2% during the last year. Volkswagen which already has two tie-ups with domestic manufacturers in the country is further looking for potential cooperation with JAC Motors of China.

One of the priorities of the company is to localize production of alternative energy vehicles within China. The company has eventually planned to unveil a Volkswagen brand sedan by next year followed by the initial launch of Audi A6, this year and fully electric car models in approaching years.

The recent report published by TechSci Research, “China Tyre Market Forecast and Opportunities, 2020” depicts that the automotive industry, in particular, has grown at a tremendous pace owing to diverse factors such as increasing disposable income, rising standard of living & automobile export demand. The share of OEM and replacement tyre market in China tyre market was witnessed to be almost equal.

As per TechSci Research, the announcement made by the German car manufacturer in the country would drive the demand for OEM tyres and simultaneously strengthen Volkswagen’s hold in the country’s automobile market, as the brand already captures a significant position in the passenger car industry in China.