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Shanghai auto plant to create 'greener' engines

SHANGHAI - German auto giant Volkswagen and Shanghai Automotive Industry Corp (SAIC) will jointly spend 240 million euros (US$278 million) to set up a new engine plant in the eastern Chinese metropolis of Shanghai.

The investment is regarded as part of VW's strategy, unveiled earlier this year, to inject another 6 billion euros into China in the next five years to secure and expand its presence in the country's promising automotive market.

Scheduled to start trial operations late next year and begin manufacturing in of March 2005, the plant will mainly produce the 1.4-liter and 1.6-liter EA111, an environmentally friendly engine for compact cars.

There is an annual output goal of 300,000 units, said Folker Weissgerber, a board member of VW.

The EA111 meets the Euro IV emission standard, currently the world's strictest environmental protection standard for vehicle emissions.

"China is the most important strategic market for Volkswagen, that's why we need to keep bringing the technical know-how into this country to realize localized manufacturing of either vehicles or auto components," Weissgerber said.

The existing engine plant of Shanghai Volkswagen (SVW), the 50:50 joint venture between SAIC and VW, has an annual production capacity of 450,000 units.

According to officials, the new plant, to be located near SVW, is expected to have a first-phase production capacity of 180,000 units annually before being fully operational in 2007.

(Asia Pulse/XIC)
 
Oct 22, 2003


 


   
         
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