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Volkswagen to Build New Auto Plant Near Shanghai

German carmaker Volkswagen will build a new plant in China to ramp up capacity and keep up with demand for passenger cars in its most important overseas market.

The factory, near Shanghai, will produce 150 thousand cars a year starting in 2006 and help Volkswagen achieve its target of manufacturing 1.6 million vehicles in China annually by 2008.

The company has signed a letter of intent to construct the factory with Shanghai Automotive Industry Corporation, one of its Chinese joint venture partners.

The latest expansion is part of Volkswagen's strategy to secure its lead as the biggest foreign carmaker operating in China's passenger-car market and stay ahead of rivals such as General Motors.

The company has a market share of more than 30 percent in China and has become increasingly reliant on its biggest market outside of Germany to offset losses in other operations around the world.
 
 (CRI.com May 4, 2004)

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80 Percent of Volkswagen's Profit Comes from China: Report
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Volkswagen Likely to Locate Beijing as Regional Center
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