SHANGHAI – Shanghai-Volkswagen Automotive Co., Ltd. (Shanghai-VW), a joint venture between Shanghai Automotive Industry Corp. (SAIC) and Volkswagen AG, will shift some production of its Santana sedan to the former Nanjing-Fiat plant, according to a report in Automotive News China.
The report said that the Santana Vista, latest version of the Santana, will be produced in the Nanjing-Fiat plant from this May, according to an official from the Nanjing Jiangning Economic & Technological Development Zone, where the former Nanjing-Fiat plant is located.
Suppliers of Shanghai-VW also said that the Nanjing plant will begin production of the Santana 3000 from May 1. A supplier says about 500 people from Nanjing Automobile Corp. (NAC) are being trained at Shanghai-VW’s plant.
SAIC and NAC announced a merger on December 26 and the Nanjing-Fiat partnership formally ended at the
Statistics show that, since it was established in 1999, Nanjing-Fiat only sold a total of 150,000 vehicles, less than that of other car joint ventures in a single year.
Shanghai-VW is in a new round of rapid expansion now, however, its production capacity has saturated. Currently, Nanjing-Fiat has an annual capacity of 60,000 units, which can be expanded to 150,000 units in the future.
As an economy car model, the Santana 3000 needs more cost control. Reports say that the employees’ payment can be reduced by 50 percent if the production is moved to Nanjing.
However, Volkswagen says the decision to shift production has not been made, according to Automotive News China.
“Volkswagen is evaluating several options to increase capacity, and Nanjing can be put in consideration as one possible option,” says Kai Grueber, spokesperson for Volkswagen Group China.
The Nanjing Jiangning official also says that Shanghai-VW is looking at producing a model of the joint venture’s own brand at the Nanjing plant. The model is under development, said the official.
Shanghai-VW started sales of the Santana Vista, the latest generation of Santana 3000, at the beginning of January.
The Santana 3000 is one of the best-selling models in the Chinese market. Its total sales registered 97,048 units in 2007, up 17 percent from 2006, according to CBU-Autostats.