Volkswagen AG said Wednesday that it would hold to its plans for investment and the introduction of new models in China despite the world economic downturn.

The Germany-based carmaker plans to increase its production capacity in its largest foreign market this year by about 5 per cent to 50,000 cars, said Winfried Vahland, head of Volkwagen's operations in China.

Vahland described the carmaker as remaining optimistic on this year's business outlook in China although not as positive as it has been in the past.

Total car sales in China for the first two months of the year grew in the low two-digit range, Vahland said.

They better than expected, but he advised caution because of the current economic uncertainties.

Volkswagen predicted slight growth in the overall car market in China in 2009.

"We ourselves want to grow more strongly than the entire market," Vahland said.