Foreign car-makers are increasing their investment in China but the country will not become a global production base for at least 10 years, according to the president of Volkswagen Asia-Pacific.
Bernd Leissner was speaking before the Auto China car show, which opens today in Beijing, where 550 models are on display and 400,000 visitors are expected over eight days.
Lavish stands by major foreign manufacturers from Europe, the United States and Asia are testament to their view of China as one of the world's fastest-growing markets over the next five years.
Volkswagen has been the most successful foreign company in China, with an investment so far of three billion euros (about HK$22.07 billion) in several joint ventures, giving it a share of about 50 per cent of the passenger car market.
'With China's entry into the World Trade Organisation, the market will become more competitive,' Mr Leissner said.
'We must produce . . . to a level equivalent to world standards. To cut costs, we must localise production. We have reached a local content rate of 80 to 90 per cent for the Santana and 40 per cent for the Polo. We can reach a level of 75 to 80 per cent overall in two to three years but will never be able to source everything in China.'
Asked if China could become a global production base for cars, as it had done with consumer products, he said this would not happen for at least 10 years.
