VW hit by 2.6m vehicle recall in China

VW's Chinese unit said 640,309 vehicles would be recalled from November 25 over the oil checks, while the country's quality watchdog had already announced on Wednesday that 207,778 Tiguans would be pulled off its roads.

"We sincerely apologize to our customers for any inconvenience caused," VW Group China said. "We will do our utmost to serve our customers efficiently and in the shortest time possible."

VW shares showed little reaction to the news, trading 0.9 percent higher at 183.95 euros as of 11.30 a.m. EST.

VW has been growing rapidly in China, where it aims to double manufacturing capacity to over 4 million cars per annum by 2018, the year it also aims to snatch the global sales crown.

It has also taken market share in a declining European market from struggling rivals such as PSA Peugeot Citroen and Fiat and is targeting record deliveries of about 9.5 million this year.

VW said it was recalling 239,000 of its Amarok pick-up truck worldwide as well, due to possible leaks in fuel lines. The action affects models built between 2010 and June 2013.

VW doesn't sell the Amarok in China, a spokesman said.

At the heart of VW's global aspirations is a strategy to expand modular production to boost the proportion of parts that can be shared among models and brands, allowing the company to build cars more rapidly and at lower cost.

Analysts have said the strategy isn't without risk and could expose VW to the threat of massive recalls if a single part, used in millions of cars, fails.

China's quality watchdog said the recalls would include VW's imported cars, such as Scirocco, Golf Variant, Golf Cabriolet and the Beetle, as well as those made at its two Chinese joint ventures with FAW and SAIC Motor Corp.

FAW will recall the Bora, Golf, Sagitar and Magotan, while SAIC will recall the Touran, Lavida, Superb, Octavia, Passat and Polo.