Volkswagen China to Build Car for Worldwide Distribution

SHANGHAI, July 18, 2007; Reuters reported that Volkswagen AG and its car venture in Shanghai will jointly develop a new car targeting the North America and China market, the venture said on Wednesday.

The top European auto maker and Shanghai Volkswagen -- a tie-up with SACI Motor, China's biggest car maker -- will develop a new sedan which would become a follow-up model of the locally produced Passat Lingyu, it said in a statement.

Shanghai Volkswagen, founded in 1984, has participated in the development of cars for sale in the Chinese domestic market, with total R&D investment of 3 billion yuan ($400 million) so far.

The planned move enables Shanghai Volkswagen to participate for the first time in the research and development of models targeting the global market, it added.

Early this month, Chery Automobile finalized a deal with the Chrysler Group to make compact cars in China under the Chrysler badge for sale in North America and elsewhere, potentially making it the first Chinese auto maker to tap the U.S. market.