Volkswagen, Europe's largest automaker, is seeking to build a $1.6 billion factory in China which may boost the company's production capacity by more than 10 percent.
According to the Hunan Research Academy of Environmental Sciences, the proposed plant will be located in the southeastern Chinese city of Changsha. The new plant would build up to 300,000 vehicles a year.
The factory would add to the estimated 2.38 million cars in annual capacity built up by Volkswagen's Chinese ventures and the disclosures come at a time when a glut in China is forcing carmakers to lower prices.
The company, which has one manufacturing venture with SAIC Motor and another with China FAW, has said it was planning to invest €14 billion (HK$141 billion) by 2016 to expand production in the country, the world's biggest car market.
The venture with SAIC is building factories in Ningbo and Yizheng in Jiangsu province to add to plants already operating in Shanghai and Nanjing, the provincial capital.
The venture with FAW runs production facilities in Changchun in Jilin province and Chengdu in Sichuan, and is building one in Foshan, Guangdong. An assembly facility is also being set up in Xinjiang.
The German carmaker's two Chinese ventures are poised to increase their combined manufacturing capacity by 38 per cent this year, JPMorgan Chase analysts estimated in August.
