Volkswagen plans to be the world’s largest automaker – a title that has been surprisingly in flux for the past several years, after three quarters of a century of GM occupying that spot – by 2018. Today the company announced another angle of how it plans to get there: expanding global production capacity in a big way. And make no mistake, at this point, it sounds extremely likely that VW will meet its 2018 goal.
As the headline says, the production capacity will come in the form of additional assembly plants. According to Volkswagen CEO Martin Winterkorn during the company’s annual press conference of the VW Group (per Automobilewoche – original text in German, translated by Google), seven of the ten new plants will be built in China.
Automobilewoche says (again, translated by Google from the original German) that in 2013, production will start in Urumqi, Foshan and Ningbo. The former is the first car factory in western China. Component plants opened this year in Changchun and Foshan, and in 2014, a new transmission plant will open in Tianjin. Also, Winterkorn announced that VW’s Supervisory Board has approved another vehicle plant in China. That new plant will come online in 2016, and will have capacity to produce up to 300,000 new vehicles per year. The assembly plant with the yet-unnamed location will increase the company’s China production capacity to over four million vehicles per year. Volkswagen’s global sales in 2012 were about eight million vehicles.
Other plants going up outside of China are in India (Scania), Russia, (MAN in St. Petersburg and a VW engine plant in Kaluga). In addition, Audi announced a while ago that it is building a plant in San Jose Chiapa, Mexico, where it will build the Q5 crossover starting in 2016.
Volkswagen already has about 100 plants in its empire, but it’s interesting to see how the company’s geographic and brand diversity has insulated it from the worst of the collapsing European market. Plus, its exposure to China’s growing market, and its investment in North America appear to be paying off in ways that rivals such as Renault, PSA, and Fiat can only dream of.