German carmaker Volkswagen is planning to invest about CNY10bn ($1.62bn) to build a new vehicle manufacturing plant in Changsha, China.
The current investment is about 12% of the overall $12.7bn that the German carmaker plans to invest during 2013 to 2015.
According to German daily Frankfurter Allgemeine Zeitung, the new plant is expected to be built with joint venture partner Shanghai Automotive Industry (SAIC).
The plant will have a manufacturing capacity of about of 300,000 units per year and is expected to commence production in 2016.
Earlier, the carmaker revealed plans to set up a budget brand in China with one of its joint venture partners by 2015, targeting to attract about 2,000 dealers and a market share of over 20%.
Volkswagen has produced about 2.6 million vehicles in China in collaboration with its two Chinese partners SAIC and FAW.
During the first quarter of 2013, the German carmaker sold about 770,000 units in China, reporting a 21% rise compared to corresponding quarter in 2012.
