- The Washington Times - Thursday, February 13, 2003

SINGAPORE, Feb. 13 (UPI) — China has become Volkswagen's second-largest market, overtaking the United States and Brazil, with says of some 513,000 vehicles in China last year, the company announced Thursday.

Speaking at a news conference, Robert Buchelhofer, a member of the Volkswagen board of management, said the group was hoping to sell more than 600,000 cars in China this year and reach the 1 million mark by 2007.

In January, the group set a record with the delivery in China of almost 65,000 cars, he noted.

Buchelhofer announced an aggressive product rollout schedule this year, with the launch of at least five new models in China, including the Gol, manufactured in Brazil. The Gol will address the under-100,000 yuan bracket market (U.S. $10,100), which was the fastest growing car segment last year.

Since 1985, Volkswagen group has sold more than 2.8 million vehicles in China, which means that more than 50 percent of the passenger vehicles registered in China are either Volkswagen or Audi cars.

The Chinese car market is driven by strong private demands, its customers focusing on retail price, quality, designs and fuel consumption.

Volkswagen has two manufacturing units in China: the Shanghai Volkswagen Co. Ltd. and the FAW-Volkswagen, which is a 50-50 joint venture with China's First Automotive Works. Total capacity of 700,000 units at the two plants has now yet been reached and at this stage there are no plan to increase this capacity, Buchelhofer said. "We are currently analyzing what level of capacity we are going to need and we will decide carefully on further expansion," he said.

Volkswagen would like to be able to use China as a manufacturing base for exports, however the local price of car components are currently too expensive for exports to be a "feasible proposition."

"We need a restructuring of the whole components industry in China. … Such restructuring has already started and I would guess it will be a fast process," he said.

Buchelhofer said the region's sales had reached 12.4 percent of total company sales worldwide. The group hit a record sales volume of 620,000 cars in Asia Pacific last year, up 34.6 percent on the year. By comparison, the group sold 4.98 million cars worldwide last year, down 2 percent.

In Japan, Volkswagen remained the leading import brand last year, with a 28-percent share of the import market.

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