As per the media reports, Volkswagen, which agreed to a 4bn euros ($5.84bn; £3.5bn) investment recently, is now mulling to increase its presence.

The company's basic aim underlying the investment is to introduce new products and enlarge production by an extra 100,000 units in China.

Nearly 1.3bn euros of the investment will be utilized in order to enhance the output capacity in both Nanjing and Chengdu by 50,000 units to 350,000 each over two years.

Furthermore, three new models would be developed by Nanjing from 2012 onwards, apart from Jetta, and in Chengdu two new models on top of the Santana Vista.

The German carmaker also makes cars in Shanghai and in the northern Chinese city of Changchun, and is currently seeing China as its most important overseas market.

Chief executive Martin Winterkorn said: "China is one of Volkswagen's most important markets worldwide."

He added: "Demand for our products is growing so fast that our capacity is no longer sufficient."

In addition, VW is also looking for an opportunity for developing cars in Malaysia, with local automaker Proton.