SHANGAHI, China — Volkswagen has announced it will build more engines and transmissions in China, part of its strategy to improve its fuel economy numbers there. The powertrain-building plan will also help VW meet rising demand for fuel-efficient vehicles in China.
In 2007, the German carmaker announced it would cut the average fuel consumption of its China-made vehicles by 20 percent by 2010.
"We are confident we will achieve the target by next year," Winfried Vahland, president and CEO of Volkswagen Group China, said in Shanghai yesterday, noting that VW has already cut its fuel consumption by 17 percent.
To realize the target, VW is pushing forward with its Powertrain Strategy, which focuses on local production of its turbocharged direct-injection gasoline engines and double-clutch automatic gearboxes.
The combination of its TSI engine and DSG transmission consumes 20-25 percent less fuel compared with competitors while it also delivers strong power and enables fast gearchanges, Volkswagen said.
"If you want to become No. 1 in the market, you have to be No. 1 in technology," Vahland said.
The company also plans to build a $1 billion new facility in Dalian in northeast China's Liaoning Province, which will make seven-speed DSG transmissions next year with an annual output of 300,000 units.
VW, the nation's biggest foreign carmaker, also makes 1.8-liter and 2.0-liter TSI engines in a plant in Dalian, which is on course to increase capacity to 30,000 units a year. It also started producing 1.4-liter TSI engines at another plant in Shanghai this year with Chinese partner SAIC.
Vahland said the demand for the 1.4-liter TSI engines is particularly high in China. That is because the government has halved the purchase tax on vehicles powered by small engines, part of its strategy to promote fuel-efficient and eco-friendly cars.
Inside Line says: Volkswagen continues on its relentless course toward domination in China. — Vivian Jin, Correspondent
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