Volkswagen Building New Factory In China

Automaker signed an agreement to build a new factory in China's far west during a visit to its headquarters by Chinese Premier Wen Jiabao.

BERLIN (AP) -- Automaker Volkswagen AG has signed an agreement to build a new factory in China's far west during a visit to its headquarters by Chinese Premier Wen Jiabao.

Volkswagen said the agreement signed Monday by chief executive Martin Winterkorn and representatives of China's SAIC Motor Corp. foresees total investment of about euro170 million ($224 million).

It says the plant in Urumqi, the capital of the Xinjiang region, should produce up to 50,000 vehicles a year starting in 2015.

Volkswagen says it also signed a memorandum of understanding with its other Chinese joint-venture partner, China First Automobile Group, to extend their cooperation by 25 years.

Wen visited Volkswagen's Wolfsburg headquarters with German Chancellor Angela Merkel.

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