Volkswagen Group to build plug-in hybrid in Foshan, China

Article by Andrew Christian, on April 7, 2014

Volkswagen Group will announce plans to build plug-in hybrids in China at the Beijing auto show this month, sources privy with the German carmaker told Reuters. The carmaker intends to produce plug-in hybrids, which boast of longer range than conventional hybrids, with Chinese partner First Automotive Works possibly at its new assembly plant in Foshan, southern China.

China Premier Li Keqiang vowed in March that the country would "declare war" on pollution as they bid to upgrade the economy and shift focus away from heavy industry. The Chinese government has disclosed a CHY10 billion ($1.61 billion) fund to help transform the way it produces and consumes energy.

China is aiming to promote green and low-carbon technology to reduce fossil fuel consumption while controlling coal use. Volkswagen is quite behind other carmakers in building environmentally friendly cars in China, although the country is its largest auto and accounted for around a third of its 9.7 million global deliveries in 2013.

Daimler and local partner BYD Co. are planning commence sales of Denza EV this year, but has yet to specify a start date. Hybrid frontliner Toyota introduced its for-China Yundon-Showanchin II hybrid model in 2013. Facing limits on carbon dioxide emissions in core markets in Europe and a push by other carmaker to develop battery-powered cars, VW is pressed to enter the market for plug-in hybrids.

VW chief executive Martin Winterkorn remarked that hybrid technology allows the carmaker to meet three key customer wishes at the same time -- emission-free electric mobility, a full range for long-distance driving and 100-percent driving pleasure. The Foshan site -- co-owned by VW and FAW -- has been producing the Golf hatchback and the Audi A3 compact since September. [source: Reuters]

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