VW to invest $2.17b in Asia in next five years

VW to invest $2.17b in Asia in next five years

Agence France-Presse, Singapore

Europe's leading car-maker Volkswagen said Thursday it would invest more than 2.5 billion euros (US$2.17 billion) in the Asia- Pacific region in the next five years, after sales rose 7.2 percent last year to outpace world growth.

The German automaker said it would continue to ride on the potentials of the expanding market in China to boost sales this year and increase the region's contribution to the company's global sales from the current 9.0 percent to double digits.

Robert Buchelhofer, Volkswagen's president for the Asia- Pacific, said total investment in the region in the next five years should be more than 2.5 billion euros.

In a news briefing here, the company said 2001 group sales in the region totaled 461,000 units, up 7.2 percent from 430,000 units a year earlier, giving Volkswagen a 5.5 percent market share.

Its rate of growth was faster than that of the global market, which expanded only 4.5 percent last year due to the U.S.-led economic slowdown.

Over the past 10 years, Volkswagen sales in the region quadrupled from 93,000 units in 1991.

Buchelhofer said at the news conference China's entry into the World Trade Organization (WTO) "will invigorate our sales in the country" and bolster its market share in the region.

He said Volkswagen plans to strengthen its presence in China by increasing the concentration of manufacturers, reforming the supplier industry, improving its sales and service networks, and introducing new models.

"We expect China to develop as one of the major economic players in the region," he said. "As undisputed market leader with more than 50 percent market share (in China), the Volkswagen Group achieved a volume increase of almost 7.0 percent in the past year."

After launching the Bora for middle class buyers in China in December, Volkswagen plans to introduce a new version of the compact Polo this year and another in 2003.

Despite the recession in Japan, the Volkswagen Group increased its sales by 6.0 percent to 70,000 units for a 27 percent share of the market for imported cars.

Buchelhofer described Australia as a "strategic market with a great potential." After selling a record 10,000 cars in 2001, up nearly 40 percent from the previous year, Volkswagen plans to double this to 20,000 in the medium term.

He said Thailand was a "potential base for Southeast Asia" leveraging on its partnership with the local firm Yontrakit. The joint venture has assembled 1,400 Passat and Audi A6 models for the Thai market.

India is another potential market, Buchelhofer said.