VW said it expects to increase exports from just 100 mln usd to 1 bln usd through the new contracts, taking advantage of labou rates that average a fifth of those in developed markets, the report said.
The plans come as VW is in the final stages of talks with its trade unions about the future of its German production facilities for components ranging from engines to electronics.
VW has been burdened by a poor supply network in China after its early start ¨C it led the market after setting up its first car assembly joint venture in 1985 ¨C left it stuck with high-cost, low-quality suppliers tied to joint venture partners.
After falling into losses and putting in new management last year the carmaker set out to make its joint ventures with First Auto Works and Shanghai Automotive Industry Corp work more closely together and share components.
virginie.mangin@xinhuafinance.com
vm/tr
© 2006 AFX News
