Volkswagen (VOW.FRA) plans to double its production capacity in China to 4 million vehicles by 2018, in an effort to offset declining European demand, Reuters reported. The company announced Thursday it will set up a new assembly plant in southern China, while another three assembly plants and two component facilities will start operation next year. Operating profit from the main Volkswagen brand fell 4.1% last year despite higher sales. At the company’s two Chinese ventures, in contrast, operating profit surged 42% last year. Volkswagen has predicted that weakness in Europe will drag on its operating profit in 2013.