On August 24, 2011, German automaker Volkswagen AG (VW), for the first time, chose to convene its global board meeting in Chengdu, China. Led by Chairman Martin Winterkorn, VW's major board members overseeing global purchase, finance, human resources, research and development, production and sales flew to Chengdu from Germany by a chartered plane.

A major issue on the agenda was to perform an acceptance test on the construction of VW's Chengdu unit and their new Sagitar assembly line and cars.

At the commencement ceremony of FAW-VW's third-phase expansion project and the EA211 engine project on July 16, Uwe Thesling, vice president of VW China, said Chengdu was an important part in VW’s efforts to accelerate its presence in western China. VW chose Chengdu and would become an integral part of the city.

From the 800 million yuan invested in the first phase, 8.1 billion yuan in the second phase, to the 7 billion yuan in the third phase, with increasing investment in Chengdu, FAW-VW has highlighted its bold move and its great expectations for developing itself in western China. It also showed strong confidence in seeking closer and broader cooperation with Chengdu and other parts of Sichuan province. Building presence in Chengdu

On October 30, 2008, a deal building the FAW-VW Chengdu Unit was signed in Chengdu, marking another milestone in the development of the auto industry in Chengdu.

The deal allows FAW-VW to set up a subsidiary in Chengdu by acquiring Chengdu FAW Automobile Co Ltd, and to manufacture VW-branded sedans in Chengdu. The plant covers an area of about 813,000 square meters, with four major processing lines, including pressing, welding, painting and general assembly operations. It will produce 150,000 cars a year initially, and will be able to make 350,000 cars a year in the future.

FAW-VW Chengdu Unit's first phase construction covered an area of about 367,000 square meters, with a total investment of 800 million yuan and an annual output of 20,000 Jettas. In 2010, the plant made 41,000 Jettas and recorded an output value of 3.5 billion yuan.

Confidence in Chengdu's auto industry

As noted in the strategic agreement between Chengdu and FAW-VW, the Chengdu unit covers an area of about 813,000 square meters. The first phase covered an area of about 367,000 square meters, while the second phase covered an area of about 446,000 square meters. These two completed phases have already amounted to about 813,000 square meters.

In fact, FAW-VW has not stopped further investing into and expanding the Chengdu unit.

On July 16, 2011, the third phase construction of FAW-VW Chengdu Unit's was officially started, covering an area of about 551,000 square meters with a total investment of 7 billion yuan. It is expected to begin production in 2013 and will make 450,000 cars a year after it is fully operational. The plant will mainly manufacture new Sagitars, new Jettas and other new models. The total output value will be 67.5 billion yuan.

On the same day, the FAW-VW EA211 engine project was also officially launched in Chengdu. The first phase will see an investment of 2.8 billion yuan, with a capacity of 450,000 engines a year after construction. It will be put into operation in March 2013. Construction of the second phase is expected to start in 2013 and finish in 2015. After these two phases are completed, the plant will be able to make 600,000 engines a year, with an output value of 15 billion yuan.

With three phases of expansion and the engine project, the FAW-VW Chengdu Unit will invest nearly 19 billion yuan, covering an area of about 1,524,000 square meters. After it is fully operational, together with auto parts, the total output value is expected to reach 100 billion yuan.

Uwe Thesling, VW China's vice president,, now 52 years old, said Chengdu was an important part in VW's efforts to accelerate its presence in western China. VW chose Chengdu in hopes the auto industry would become an integral part of the city.

A month later on Aug 24, the VW global board meeting was held in Chengdu, China. As a major issue on the agenda, the construction of VW’s Chengdu Unit and its new Sagitar assembly line and cars will undergo acceptance tests. The plant is expected to make 3,000 cars by the end of the year and 150,000 cars next year, if it passes the test.

The third phase expansion of FAW-VW Chengdu Unit's was officially started on July 16, even before the second phase had officially gone into operation, said Li Hua, deputy executive director of Chengdu Economic and Technological Development Zone. "It underscored the confidence of FAW-VW in Chengdu," Li said.

Boosting the development zone

As the major platform for Chengdu's comprehensive auto industry, Chengdu Economic and Technological Development Zone has a promising prospect. It is planning to start from a comprehensive auto industry zone to a first-tier player in China's auto industry zones, and eventually becoming a top global auto industry zone.

The strategic goal is to shape Chengdu into a comprehensive auto industry zone, attracting global players and to integrate the industry with the city.

In five to ten years, it seeks to primarily build the Chengdu and Chongqing auto hubs, as well as a new highland in China's auto industry, to form the physical shape of the comprehensive functional space of an auto city to reinforce the auto industry zone's position in China's second-tier auto industry zones. In 20 years, it will build a first-class auto city in China and become a first-tier auto industry zone. In 30 to 50 years, it will be a top auto industry zone in the world and serve as a pillar industry for Chengdu to become a modern pastoral city.