FAW-Volkswagen (VW) has started construction of a new vehicle production plant in Tianjin, northern China. In a statement, VW said the new plant will create 6,000 jobs and will produce 300,000 units per annum (upa) once fully operational. The facility, covering one million square metres, is located in the Tianjin Economic-Technological Development Area (TEDA), which also houses a vehicle manufacturing facility of Toyota, among others. VW already operates a transmission plant in Tianjin.
Significance: As reported earlier, the plant is likely to come on stream by 2018. The new plant is part of VW's strategy to achieve annual production capacity of 5 million units in China by 2020. Chinese media reports state that the new Tianjin plant will involve a total investment of CNY19.5 billion (USD3 billion), but the automaker has declined to confirm the amount. The new plant will significantly bolster VW's production capacity in the Beijing-Tianjin-Hebei region and will service markets in central and northeast China. In a recent interview with IHS Automotive, VW China president and CEO Dr Jochem Heizmann said the automaker is operating to its maximum capacity in China. Consequently, the new plant is likely to ease production worries for the automaker. IHS Automotive forecasts the Audi Q2 sport utility vehicle (SUV) will be the first vehicle to be produced at the plant, while the Q3, Q4, and a VW-branded C-segment SUV are expected to be built at the facility in coming years.
