Volkswagen to build 10th China assembly plant

Volkswagen (VOW.FWB) has revealed plans to build a 10th plant in China at a cost of US$622 million, Bloomberg reported. The new factory in Foshan, Guangdong province, will open in 2013 and have an annual output capacity of 300,000 vehicles. It will operate as a joint venture with First Auto Works, which is financing the project. When complete, the factory will have a full assembly plant, including a press shop, body shop and paint shop. Volkswagen wants to double its production capacity in China to three million vehicles within four years, and it will invest US$7.2 billion during this period. The company sees China as key to its plan to surpass Toyota Motor (TM.NYSE, 7203.TYO) in sales and profitability by 2018. China’s passenger car sales rose 26% year-on-year to 1.04 million units in May. Sales have increased 55% to 5.68 million units since the start of the year.