New Volkswagen Plant for China

In Lingang, a new industrial city under construction to service Shanghai's deep-water port, Volkswagen will build a new factory with Shanghai Automotive Industry Corp. (SAIC), the country's largest sedan maker. The deal was announced during Chinese Premier Wen Jiabao's visit to Germany.

VW remains the dominant foreign player in China's vehicle market, with a 30 per cent market share in the first quarter of this year. But its market share has been declining steadily for at least three to four years, from a high of more than 50 per cent, in the face of intense competition from other joint-venture manufacturers and a proliferation of new models.

Reports just continue to be posted on the exploding automobile market in China.

[Update] In a related report, DaimlerChrysler AG said today that it plans to manufacture Mercedes C- and E-class cars at a new production facility in Beijing with Chinese partner BAIC Ltd. The initial production of 25,000 vehicles will be built from kits shipped by Mercedes-Benz.