Volkswagen 2003 China Sales 697,961 Units; Up 36% On Year

SHANGHAI January 7, 2004; Jane Lanhee Lee writing for Dow Jones reported Germany's Volkswagen AG , the leading foreign automaker in China, Wednesday said it sold 697,961 vehicles in the country in 2003, up 36% on year.

Its joint venture with major China automaker China FAW Group Corp., based in the northern city of Changchun, sold 298,006 cars, up 55% on year. That venture produces one of the country's best-selling models, the Jetta, as well as Audi sedans.

Volkswagen's joint venture in Shanghai with another major company, Shanghai Automotive Industry Corp. (Group), sold 396,006 cars, up 32% on year. That venture makes the Santana and Passat sedans and the Polo compact car.

Imports accounted for 3,949 of Volkswagen's China sales, including 19 Phaeton limousines and 51 Bentley sedans, a spokeswoman at Volkswagen (China) Investment Co. said.

The German automaker, which has operated in China for nearly a decade, once sold more than half the country's cars, but its share over the past few years has been whittled down to about 38% as its global competitors have penetrated the market. Its exact market share in 2003 wasn't available.

Rival General Motors Corp. still lags Volkswagen, but is gaining ground with a 46.4% rise in China sales last year to 386,710 vehicles.

The two firms' sales growth, however, is far below the 70% on-year jump in locally made car sales in the first 11 months of 2003.

According to data from the China Association of Automobile Manufacturers, 1.73 million locally made cars were sold between January and November last year, thanks to the entry of many global automakers.

To maintain its market leader position, Volkswagen last year said it planned to invest about EUR6 billion in China over the next five years to double its annual production capacity to 1.6 million cars.