Volkswagen Group Co (VW) plans to further widen Chinese operations and offer battery-powered cars in the biggest auto market as China targets air pollution by rewarding electric-vehicle buyers.
VW said on Saturday that it plans to add capacity in its top market, the destination of over a third of its 2.4 million first-quarter group deliveries, as economic stimulus measures and demand in China’s interior regions fuel sales.
VW Group deliveries may increase to more than 3.5 million cars this year, a record, from 3.27 million last year, chief executive Martin Winterkorn said at a company event.
The German group, one of the first global automakers to establish production facilities in China in the 1980s, will push its environmental credentials as China moves to upgrade its economy and shift away from heavy industry.
China’s government announced in February a 10 billion yuan (US$1.61 billion) fund to help change the way it produces and consumes energy. It aims to promote green and low-carbon technology to cut fossil-fuel use and control coal consumption.
“Here in China, as elsewhere, people’s expectations of mobility and the automobile are changing faster and faster,” Winterkorn said.
Europe’s top automaker, which also sells the high-performance Lamborghini and Bentley brands in China, is a late starter in terms of making environmentally friendly cars there.
Rival Daimler AG and Chinese partner BYD Co (比亞迪) plan to start selling their Denza electric vehicle this year, while Toyota Motor Corp unveiled the Yundon-Showanchin II hybrid last year, specifically developed for China.
VW plans to start selling electric versions of the Up city-car and the Golf hatchback this year, followed by plug-in hybrid versions of the Audi A3 compact and Golf GTE next year, the company said.
Plug-in hybrids can travel longer distances on battery power than ordinary hybrids and can be recharged at public charging stations. VW also said it plans to develop and build plug-in versions of Audi’s A6 model and a new, mid-sized saloon with its two Chinese partners.
“Here in China we are now setting out on the road to a future of emission-free mobility,” Winterkorn said.
VW, which has more than a dozen factories in China, plans to expand its distribution network by half to 3,600 dealers by 2018 from 2,400 last year, Jochem Heizmann, the head of VW’s China operations, said at a briefing.
The automaker’s joint-venture partners, First Automotive Works Corp (第一汽車集團) and Shanghai Volkswagen Automotive Co, are planning to spend 18.2 billion euros (US$25.16 billion) through 2018.