Volkswagen in race to make indigenous car

VOLKSWAGEN, the German car giant which also owns the Audi and Skoda marques, has become the latest car manufacturer to join the host of companies helping China make the first completely Chinese car.

Last month, United States car-makers Ford, GM and Chrysler said they hoped to co-operate with China in realising its dream to have a modern, indigenous motor industry and simultaneously extend their business in China.

Volkswagen's managing director and chairman for the Asia-Pacific Region, Martin Posth, said he had discussions in Beijing and was keen to help.

'It is not something China can do overnight,' he said. 'If it is just the body, I think China could do it in a couple of years. It takes longer to design an axle or an engine or transmission system.' Even so, Mr Posth said it should be 'certainly possible' for China to have an indigenously-produced carby 2000.

Volkswagen had experience of localising manufacture in countries such as Mexico, Brazil, Nigeria and South Africa, but China had moved the fastest, said Mr Posth.

The firm's Shanghai joint venture is now expanding to produce 300,000 Santana cars a year with indigenous parts accounting for 85 per cent of the content. 'No country has localised with this level of quality in this short a time,' said Mr Posth. 'China started virtually from scratch and from the first car in 1985, it has taken 10 years to localise.' Volkswagen and its Chinese partners now had a 58 per cent market share of the domestically produced car market, said Mr Posth, and were currently expanding a joint venture with the First Automobile Works in Changchun, Jilin province while a trial assembly of VW City-Golf cars was started in Shunde this year.

If the trial is successful and Shanghai meets its contract targets, the venture will be extended.

At the Shanghai plant, which has seen production grow from an initial 30,000 cars a year, plans are now afoot to produce a new model, the Santana 2000.

The new car will share the same engine and transmission system but will have a new look and a more comfortable interior.

'Competition is increasing all the time,' he said. 'At the start of this year, import duties were reduced from 300 per cent to 180 or 120 per cent, depending on the size of the engine.