Volkswagen Starts Construction of 300,000-Vehicle Plant in China

Volkswagen AG began construction of a new factory in Changsha, China, as part of plans to increase manufacturing capacity in the world’s biggest auto market.

The plant, with an annual capacity of about 300,000 vehicles, is scheduled for completion by the end of 2015, Wolfsburg, Germany-based Volkswagen, Europe’s largest automaker, said in an e-mailed statement today.

“We are expanding our capacity in China to 4 million vehicles per year by 2018 in order to meet demand from our Chinese customers,” Jochem Heizmann, head of Volkswagen’s operations in China, said in the statement.

The announcement follows comments by Volkswagen that it had no intention of building a factory in the city, located in the south-central province of Hunan. The Changsha plant is one of seven factories being built by Volkswagen as part of a 9.8 billion-euro ($13 billion) investment in China, whose auto association projects new-vehicle sales will top 20 million units this year.

Bloomberg News reported the automaker’s plan for the Changsha plant on Oct. 23, citing a request for public feedback on the plant by the Hunan Research Academy of Environmental Sciences and investment figures from the Changsha National Economic & Technical Development Zone.