FRANKFURT, Nov 28 (Reuters) - Europe's biggest carmaker, Volkswagen AG , said on Friday it had built its first car in China destined for export and would sell around 600 Chinese-built vehicles a year in Australia in the medium term.
VW is the dominant auto maker in China, controlling around a third of the intensely competitive market, but had said in the past that exporting from the country would not make sense because costs there are still higher than in Germany.
The Wolfsburg-based giant said the first Chinese-built car destined for sale in Australia was a right-hand drive, notchback version of its small Polo model, which it launched in both Europe and China about two years ago.
The cars are being built at its factory in the eastern commercial centre of Shanghai, a joint venture with Shanghai Automotive Industry Corp and one of two main ventures it has in the country.
VW saw its sales growth in China slow in the third quarter as it struggled to increase capacity at the same speed as the market is expanding. It aims to double annual production there to 1.6 million vehicles in the next five years.