Volkswagen Invades China

Volkswagen (VW) is an automaker, headquartered in Wolfsburg, Germany. VW is a subsidiary of the Volkswagen Group, which is the largest manufacturer of automobiles in the world. The Volkswagen Group manufacturers the Audi, Porsche, Bentley, Bugatti, Lamborghini, SEAT, Škoda and VW brand of automobiles.

On June 22, 2018, VW opened a new automobile factory in Foshan in the People’s Republic of China (PRC). VW has recently announced that construction has begun on another new automobile factory in Shanghai. The Shanghai manufacturing plant is scheduled to begin automobile production in 2020. VW’s two manufacturing plants will produce electric vehicles (EVs) using the patented Modular Electric Drive Kit platform.

VW’s aggressive move into the PRC is due to the rapid growth of EVs in the country and around the world. In 2017, over one million EVs were purchased around the world, setting a new record. There are now over three million EVs operating around the world. The PRC and the United States have the most EVs of any country with 1.23 million and 0.76 million, respectively.

The PRC government’s goal is to achieve total annual EV and hybrid vehicles over two million by 2020. Analysts anticipate the government will continue to put incentives to purchase EVs and financial penalties on combustion engine vehicles. Global marketing information services company, J. D. Power projects annual EV sales in the PRC will grow by 40 percent over the next few years.

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