German auto giant Volkswagen AG on Thursday opened a new plant with an annual capacity of 300,000 cars in eastern China as “an important strategic pillar” for expanding sales in the world’s largest auto market.

The Shanghai Volkswagen plant in Ningbo city, near Shanghai, has started making Volkswagen’s Skoda Superb cars and will produce other Volkswagen and Skoda models, the company said.

“This new state-of-the-art factory is another proof of Volkswagen Group’s full commitment to China,” said Martin Winterkorn, the group’s chairman.

“For our group brands, this Ningbo plant will be a driver for tapping the full potential of the growing markets south and west of Shanghai,” Winterkorn said.

Volkswagen said it aimed to increase its production capacity in China to about 4 million vehicles by 2018.

Last month, the company opened another 300,000-capacity plant through its FAW-Volkswagen joint venture in Foshan city in the southern province of Guangdong.

Volkswagen said its sales in China, the company’s largest market, soared by 23 per cent to 2.8 million of the 9.1 million vehicles it sold worldwide last year.

Sales in China rose 18 per cent in the first nine months of this year to 2.36 million units, it said.

Its Shanghai and FAW joint ventures produce more than 20 Volkswagen, Skoda and Audi models in China.

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