FAW-VW to take on Seat in China

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Previously VW announced that they were going to introduce Seat into Southern China as a cool new urban brand in an area where they have a low take up of vehicles compared to the North of China where all VAG products are widely sold.

Information is still thin on the ground, but it is expected that FAW-VW are going to build a new factory in Guangzhou, which will produce around 200,000 vehicles per year, which would make it VAG’s fifth China plant after Shanghai, Nanjing, Changchun, and Chengdu plants.

It was originally expected that Seat would enter China within 2009, but due to the economic conditions last year the plan was delayed until 2010. The VAG group currently stands for around 17-20% of the Chinese market, however in the southern provinces they have around 10% of the market, which is a lot lower than the Japanese brands that are dominating the region.

Southern car buyers are traditionally younger than the their northern neighbours, and the lack of a cheap car that attracts young professional buyers is a large market that VAG appear to have overlooked. Their biggest competitors in China, GM, have succesfully launched the Chevrolet Spark, and Sail, both of which are popular models for young buyers. On the other hand, VW’s cheapest vehicle is the mark2 Jetta, which is far from being a desirable car when you’re a 23 year old office kid.

Which models will be introduced first into China is still a mystery, however it is likely that Seats first offering will be the Seat Ibiza