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VW thinks big for cars in China

THE Shanghai Volkswagen Automobile Co Ltd is thinking big about mid-to-high class sedans in China even though the government is aggressively promoting smaller vehicles for their energy savings.

"Sales for the B-segment decreased for the first quarter this year, which is the opposite to what happened in the smaller car segment, said Frank Brustmann, vice president of Shanghai Volkswagen.

"Nevertheless, it's not only related to the government policy - demand for B-class is still quite high and therefore everybody will invest in this segment as well."

Sales of small vehicles soared 22 percent to 1.41 million units for the first quarter this year, compared with a 7 percent increase for the overall market, after the state government halved the sales tax on cars with engine displacements of 1.6 liters or less.

The nation's second largest passenger car maker in terms of sales last year is presenting a revamped Passat Lingyu at the Auto Shanghai 2009. The Passat New Lingyu, to be launched later this month, will be available with engine capacities of 2 liters, 1.8 turbo and 2.8 V6.

Brustmann said the Passet New Lingyu is aimed at successful business entrepreneurs for both business and family use. The car maker expects the new model will gain a 9 percent market share in the mid-to-high class segment in competition with Toyota's Camry and Honda's Accord.

Sales of Shanghai Volkswagen, which sold VW's Santana, Polo and Lavida, gained 6 percent to 130,000 units for its VW branded vehicles for the first quarter. March sales even jumped 26 percent on a month earlier.

Brustmann said the car maker has added additional capacity as it is confident it will continue this level to the second quarter.

"We have to be careful regarding some projections for the whole year, but we are quite optimistic this year will be at least on the level of 2008 and hopefully could be a little bit better," he added.

Shanghai Volkswagen is Volkswagen's flagship venture with Shanghai Automotive Industry Corp. It also produces cars under the Czech brand Skoda for the Volkswagen Group.

Volkswagen earlier announced it would double its Chinese sales to 2 million units by 2018. Brustmann said Shanghai Volkswagen aims to account for at least 50 percent of the sales projection as it expands production and adds new models.


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