By David Sachs

Volkswagen will spend 2.5 billion euros ($2.69 billion) on expanding a production and research campus in China as part of its strategy to compete in the world's biggest car market.

The German car giant said Thursday that it will invest the money at its hub in Hefei, Anhui Province, to speed up innovation on and strengthen local research and development capabilities.

The investment will accelerate the development of two Volkswagen brand electric-car models with China-based partner XPeng, the company said.

China is the world's largest car market, and the investment is part of Volkswagen's strategy of developing new vehicles in the country that both appeal to local consumers and arrive to market more quickly.

Write to David Sachs at

(END) Dow Jones Newswires

04-11-24 1058ET