Volkswagen AG &lt;VOWG.F>,VW, plans to construct a major new car plant in China, a
company spokesman said. However, he added that discussions with
China about the plant were still at an early stage.
    It would have an annual capacity of up to 300,000 vehicles
but would not be built until the 1990's at the earliest.
    VW already has a large joint venture with the Chinese
authorities under which it produces the Santana model in
Shanghai. The spokesman said the Shanghai plant should have an
annual capacity of 30,000 cars by the end of next year. So far
15,000 Santanas have been produced since output began in 1985.
    The VW spokesman said no decision had yet been made about
the type of car which could be built at the new plant.
    However, company officials have said VW plans to bring out
a cheaper car than the Santana for the Chinese market and which
will be aimed at private owners. The Santana is generally used
by government officials and visiting foreigners or as taxis for
tourists.
    No details were given about the extent of investment in the
new plant and it was not clear where it would be built.
 Reuter
