The Volkswagen Group is planning to invest an extra 1bn euros in China this year to finance the building of new manufacturing facilities and the introduction of new models.

According to Zhang Suixin, general manager of Volkswagen (China) Investment Co, the further investment boost follows the VW announcement of long term commitment – it plans to increase investment by 600m euros annually by 2007.

"The introduction of new models and the enlargement of our manufacturing capacity are most critical for our operation in China," Zhang said.

Production under the Shanghai VW JV will increase to 500,000 - 600,000 units this year from 300,000 units in 2002.