Volkswagen AG’s China enterprise with SAIC Motor Corp Ltd has began constructing a $2.5 billion new vitality car (NEV) plant in Shanghai, which is able to make VW’s luxurious Audi AG model vehicles, a doable first for the enterprise.
The brand new plant is a key step for Audi to diversify manufacturing of its vehicles on the planet’s largest automobile market from its long-standing native accomplice, China FAW Group Corp Ltd. This shift has been delayed amid resistance from native sellers.
SAIC Volkswagen stated the brand new plant would have an annual capability to make 300,000 vehicles and start manufacturing from 2020. Audi offered 481,387 autos in China from January to September this 12 months.
Audi unveiled the plan to bolster ties with SAIC in late 2016. Earlier this 12 months the Germany luxurious carmaker purchased a 1 p.c stake within the SAIC Volkswagen enterprise, paving the way in which for the three way partnership to supply and promote Audi vehicles.
Volkswagen presently will get a bigger proportion of the proceeds from the 50-50 tie-up with SAIC than from its 40 p.c stake within the enterprise with FAW.
SAIC Volkswagen stated in an announcement on Friday the plant would price 17 billion yuan ($2.5 billion) and would make VW and Skoda fashions in addition to Audi vehicles. It should assist VW faucet China’s fast-growing marketplace for NEVs, a class comprising electrical battery vehicles and plug-in electrical hybrid autos.
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