Volkswagen and its Chinese joint-venture partner SAIC Motor have signed a contract to build a new EUR170m vehicle manufacturing plant in Urumqi, Western China.
According to the company the new plant will be capable of producing 50,000 vehicles per annum starting 2015.
In addition, Volkswagen and China First Automobile Group (FAW) have signed a letter of intent regarding the early extension of the FAW-Volkswagen joint venture by a further 25 years.
Currently the two companies aim to further expand their strategic partnership going forward, and concentrate on projects relating to electro-mobility and new product developments and services in the financial services sector.
Last year the German carmaker had sold 2.26 million vehicles in China, with deliveries increasing by 15.6% to over 633,000 units in the first three months of this year.
Both the joint ventures Shanghai-Volkswagen and FAW-Volkswagen has about 50,000 employees who build vehicles, gearboxes, chassis and engines at ten plants.
Volkswagen's two Chinese joint ventures will invest a total of EUR14bn by 2016 to expand their commitment.
