BEIJING -- Due to worsening economic conditions, FAW-Volkswagen Automotive Co. has postponed a plan to boost annual production capacity in Chengdu, China, to 350,000 units.
With annual capacity of about 20,000 cars, the company's existing plant in Chengdu makes the Jetta mid-sized car.
FAW-Volkswagen has been seeking approval of the Chinese government to build the new plant capable of making 350,000 cars a year, according to China's Ministry of Environmental Protection.
The ministry has published the information about the new plant on its Web site to solicit comments from the public on the plants' environmental implications.
Total investment in the plant is estimated at 8.87 billion yuan ($1.29 billion), according to the information released by the ministry.
However, capacity at the Chengdu plant would not be increased before 2011, Winfried Vahland, CEO of Volkswagen Group China said in an interview with Automotive News China on January 14.
Second model delayed
FAW-Volkswagen has been making the Jetta in Chengdu since 2007. Its new plant will be built on the premises of its existing Chengdu plant, according to a spokesman for FAW-Volkswagen.
The existing Chengdu plant in southwest China will continue to make the Jetta and FAW-Volkswagen has no fixed plan for the plant to start building a second model, says Vahland.
FAW-Volkswagen planned to put its new Chengdu plant into production in 2010, with an initial capacity of 200,000 for both the Jetta and Sagitar cars, says a supplier executive. "The automaker has postponed its original plan due to the gloomy economic outlook in China," he adds.
FAW-Volkswagen assembled about 14,000 units of Jetta in Chengdu in 2008. It plans to build 18,000 Jetta cars there in 2009, according to a manager of its Chengdu plant.
Headquartered in Changchun, FAW-Volkswagen produced 479,000 Volkswagen and Audi badged cars in 2008, a drop from 490,000 in 2007, according to the company's releases.
The automaker resumed production of its Volkswagen-brand vehicles in Changchun earlier this month after closing it down for half a month at the end of 2008 "for maintenance," says the FAW-Volkswagen spokesman.
FAW-Volkswagen Automotive Co is a joint venture between China FAW Group Corp. and Volkswagen.