VOLKSWAGEN AG is opening three new factories in China with its local partner FAW Group as it steps up efforts to maintain leadership in the world’s biggest auto market.

Two of the new facilities will be in Tianjin and Guangdong’s Foshan, Volkswagen said, adding it has just opened one in Qingdao this week. The plants will focus on bringing more sport utility and electric vehicles for local production, the fastest growing segments of China’s auto market.

Wolfsburg, Germany-based VW is among automakers expanding local production of sport utility and electric vehicles even as China eases access to its market by reducing import tariffs.

The automaker boosted sales in China by 13.4 percent in the first quarter of the year to 1.01 million units, mainly with the help of models manufacturing under its two local joint ventures. It plans to sell the compact sport utility vehicle it developed with SAIC Motor Corp., its other partner, across the globe.

The Qingdao factory opened with the introduction of the new Bora on the MQB platform and will produce battery systems, according to the statement. The Foshan factory will open in June and the Tianjin facility in August.

Volkswagen has vowed to introduce 40 new locally produced new energy vehicles (NEVs) over the next seven to eight years in China as it prepares to deliver up to 1.5 million NEV sales annually by 2025.

The company and its partners will be investing 15 billion euros (US$17.5 billion) in the country for electrification, autonomous driving, digitalization and new mobility service developments.

(SD-Agencies)