FAW Volkswagen to Produce 171,000 Vehicles in 2002

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Last updated at: (Beijing Time) Monday, February 04, 2002

FAW Volkswagen to Produce 171,000 Vehicles in 2002

FAW Volkswagen, a 50-50 joint venture between China's First Automotive Works and German auto giant Volkswagen AG, plans to manufacture another 500,000 passenger cars over the next three years, according to a high-ranking executive of the company.
The Changchun-based company, aimed to produce around 171,000 vehicles this year, including 92,000 Jetta, 29,500 Audi A6 and 50,000 newly launched Bora sedans.

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Ambitious plan based on expected increase

FAW Volkswagen, a 50-50 joint venture between China's First Automotive Works and German auto giant Volkswagen AG, plans to manufacture another 500,000 passenger cars over the next three years, according to a high-ranking executive of the company.

Peter Wolters, vice-president of FAW Volkswagen, said the company made the ambitious plan based on an expected consecutive increase in its annual production in coming years

"The plan could be achieved in a shorter period of time, maybe two and half years," Wolters said in last Friday.

The plan came after total sales of the joint venture reached 500,000 units over a period of 10 years.

Qin Huanming, president of FAW Volkswagen, said the company's production would continue to focus on A- and C-class passenger cars.

The Changchun-based company, aimed to produce around 171,000 vehicles this year, including 92,000 Jetta, 29,500 Audi A6 and 50,000 newly launched Bora sedans, Qin said.

The company sold 124,000 vehicles last year, an increase of 17 per cent over that of 2000, he said.

FAW Volkswagen has announced it will begin to produce the diesel-engine Jetta in March.

The model, which mainly targets taxi companies, will be the first diesel sedan to be made in China.

The company will also start to manufacture the 1.6-litre Bora in June.

By the end of January, sales of the 1.8-litre Bora, which was launched on the market last December, amounted to 4,000 units.

Upgrade performance instead of cutting prices

Wolters said FAW Volkswagen had no plans to cut the price of its products in the near future.

"We are committed to upgrading the technical performance of our products, instead of cutting prices, to lure consumers," Wolters said.

FAW Volkswagen is seen as one of the few hard-liners in an ongoing price war currently taking place in the domestic car market.

Many carmakers, such as Shanghai Volkswagen - the other car joint venture of Volkswagen AG in China, Shanghai General Motors and Tianjin Automotive Industry Group, have lowered the prices of their products in a struggle for market shares amid an expected jump in auto imports, as a result of China's sharp tariff cut.

The most aggressive action so far this year has been made by Shanghai General Motors, which devalued its 2.5-litre Buick sedans by 30,000 yuan (US$3,610) on Jauary 31.

On January 1, China decreased its tariffs on auto imports to 43.7-50.7 per cent from 70-80 per cent, the biggest cut after the nation's entry into the World Trade Organization in December.

Backgrounder: FAW-Volkswagen

FAW-Volkswagen Automotive Company, Ltd. is a large-scale joint venture car manufacturing enterprise. The shareholders are First Automobile Works of China (60%) , Volkswagen AG (30%) and Audi AG (10%) of Germany. It was established on February 1991 and started business in the following September. The company was finally completed and launched into full scale production in July 1996.

FAW-Volkswagen was the first large scale modern car manufacturer in China. Since establishment, the company made significant progress with the production of cars and parts' localization.In 1991 FAW-Volkswagen was named as "Enterprise with advanced Technology" by the Ministry of Foreign Economy and Trade. In 1995, the Company won the award of "Well - known and Superior Quality Enterprise in China's Automobile Industry" given by the National Statistics Bureau. The planned annual production capacity is 150.000 cars, 270.000 engines and 180.000 transmissions. (More)

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