Shanghai VW's sixth passenger car production site will be located in Zhejiang's seaport city of Ningbo. The new site will boast a yearly production capability of 300,000 vehicles, amounting to over 36 billion yuan ($5.65b) for the joint venture.

The JV will invest 11.76 billion yuan during the site's first production phase, which is scheduled to be completed by 2013.

Meanwhile, Shanghai VW will construct a center for auto part suppliers in the city's Hangzhou Bay New Zone. The JV estimates that the center will attract over 10 billion yuan in investments from auto-parts companies, helping generate over 25 billion yuan worth of parts annually.

Analysts believe that the new site will help stimulate the automobile industry in all of Zhejiang, with some predictions seeing Ningbo's auto-parts industry growing by over 70 billion yuan.

As one of China's earliest foreign joint ventures, Shanghai VW has sites scattered throughout the country, with factories in Shanghai, Nanjing and Yizheng, Jiangsu.