VW to invest 1.84b euros in Asia Pacific
VW to invest 1.84b euros in Asia Pacific
SINGAPORE (AFP): German auto-maker Volkswagen AG said Tuesday it will invest 1.84 billion euros (US$1.72 billion) in China and the Asia-Pacific region in the next five years.
Robert Buchelhofer, the Volkswagen board member responsible for the region, said 1.6 billion euros will be spent in China to position the company ahead of the country's entry into the World Trade Organization (WTO).
"We see a major opportunity for us in China with WTO," Buchelhofer told in a news conference in Singapore.
Japan and Australia will share the remainder of the investment along with some Southeast Asian countries.
The Asian push by Volkswagen, whose venerable Beetle made its first entry into Asia in 1952, comes on the back of an "unprecedented sales record" in the region last year.
Buchelhofer said Volkswagen delivered 430,000 cars in 2000, up 10 percent from 390,682 in 1999, raising its market share to 5.4 percent. Global sales for the Volkswagen group totaled more than five million vehicles.
"Encouraged by the impressive performance of our brands in the region which reflects the strong identity and premium position our brands enjoy in the marketplace, Volkswagen is committed to invest 1.84 billion euros in the Asia Pacific region in the next five years," Buchelhofer said.
"We will further expand our sales and service networks, introduce new products, streamline the procurement process and reinforce our brand values," he added, saying he did not believe the impact of the U.S. economic slowdown on the Asia-Pacific would be as serious as forecast.
The investment in China, where Volkswagen has manufacturing plants in northeastern Changchun and Shanghai in the south, will be geared towards churning out new products to meet growing domestic demand.
Deliveries in China rose 6.5 percent to 336,000 vehicles last year, giving Volkswagen a 54 percent share in China's automotive market. The firm is targeting sales of 450,000 cars in China in five years.
The high-end Passat was the main driver of growth but the company was prepared for an expected rise in demand for compact cars, Buchelhofer said.