German carmaker Volkswagen Group announced on Friday it plans to
lower the fuel consumption and exhaust emission of its China-made
cars by more than 20 percent by 2010 with the introduction of its
latest-generation engines and gearboxes.
Under a plan labeled "China Powertrain Strategy", the group will
spend US$600 million on the manufacture of its most advanced
engines and gearboxes with local partners to equip all of its new
cars built in the world's second-biggest vehicle market, said
Winfried Vahland, Volkswagen's executive vice-president and China
chief.
Vahland said Volkswagen's plan is in response to China's goal to
cut energy consumption per unit of gross domestic product in 2010
from 2005, which was announced by Premier Wen Jiabao at the
beginning of March.
"Volkswagen Group China takes its responsibility as a market
leader to guarantee growth in compliance with environmental
protection and ahead of government regulations," he said.
As a first step in its plan, Volkswagen on Friday started
production of its 1.8-liter turbo FSI, four-cylinder, four-valve
engine in a joint venture in Dalian with the First Automotive Works
Corp (FAW), China's No 2 vehicle group.
The engine produces a maximum power of 118KW/5,000-6,200rpm and
offers a top torque of 250Nm/1,500-4,200rpm. It will be fitted in
two models to be introduced in China - the Magotan mid-sized sedan
and the Octavia compact sedan.
The Magotan will be manufactured in June at Volkswagen's car
venture with FAW in the northeastern city of Changchun. The Octavia
will be launched in May at the German group's other car venture in
Shanghai with SAIC Motor Co Ltd, China's top automaker.
The engine venture in Dalian, in which Volkswagen and FAW hold
60 and 40 percent stakes, will have an annual production capacity
of 300,000 units by 2011 with a total investment of 1.5 billion
yuan. The plant will also assemble a 2.0-liter engine in the
future. The venutre's engines will also supply Volkswagen's markets
abroad.
Vahland said Volkswagen will reveal detailed plans before the
end of this year to bring its other advanced engines as well as
gearboxes into China's production.
The group will also use light-weight material technology in the
components of its vehicles made in China to further reduce their
fuel consumption and exhaust emission, he added.
Volkswagen has another engine joint venture in Shanghai. It
manufactures gearboxes in the city with SAIC and FAW. The German
carmaker also runs a platform spare parts venture in Changchun with
FAW.
"We have confidence to grow our China sales and profit this
year," Vahland said, without providing specific targets.
Volkswagen's sales in China jumped by 24.3 percent year-on-year
to 711,298 units in 2006, keeping its leadership in the nation's
passenger car segment.
Last year, the group regained profit in China thanks to the
strong sales growth and its aggressive cost-cutting efforts, after
posting losses in the previous two years.
Sales of China-made vehicles climbed by a quarter to 7.22
million units last year, including 4.2 million passenger cars,
according to industry data.
Vehicle sales this year are forecast to reach 8.5 million units
and passenger cars surpassing 5 million units.
(China Daily March 31, 2007)