Volkswagen and Shanghai Automotive Industry Corp are to invest a combined US$278m in a Shanghai plant to make 1.4- and 1.6- litre engines, reported Bloomberg. Operations in the 180,000-units-a-year capacity plant should begin in 2005 and annual production could be expanded to 300,000 engines. The equity shares in the new company were said to be still under discussion. Volkswagen already constructs up to 750,000 engines in China each year at its ventures with Shanghai Auto and China FAW Group in Changchun.
Meanwhile, General Motors wants Shanghai Automotive to take over the 50 per cent stake in Jinbei-General Motors Automotive currently owned by the city of Shenyang, according to Liaoning governor Bo Xilai. Jinbei suffered a Yn31m loss in the first half of 2003, despite almost doubling sales from a year earlier.