Volkswagen appears to be looking at exports to China as one option of maintaining plant output in Europe and minimising the risk of inventory build-up. According to its CEO, Martin Winterkorn, speaking from Sao Paolo in Brazil last November, the company could soon be exporting around 200,000 cars, including Audi and Skoda models, from plants in Europe.

VW’s brand management director, Paul Hu, based in Shanghai, responded that this number would not be reached soon, telling reporters “China is not like a sponge that can take in water at any time” and denied the company would follow the export strategy Winterkorn suggested.

VW has since tried to clarify the apparent discrepancy, stating that Winterkorn did not have a specific timeframe in mind. “It was just an estimation about possible export sales for the group to China, if the demand in the biggest car market grows further as expected,” said a spokesman for the company.

VW’s continuing strength in China includes growing imports and local production among the company’s joint ventures, including Shanghai VW and FAW-VW. Indeed, Winterkorn’s outlook is already in line with IHS projections for next year.

The VW Group recorded a growth in deliveries of 19.6% in China between January and October of 2012, reaching 2.26m units against the same period in 2011 (1.89m), while VW’s European exports were closing in on Winterkorn’s projected figure for the full year. VW says that exports to mainland China stood at 140,600 units to October 2012, up nearly 51% and much higher than the average growth rate for imported cars of 19%. IHS Automotive projected exports would be 189,000 for the year.

Christophe Stürmer, research director of OEM strategy at IHS, said that exports to China had been very helpful for some OEMs in keeping their volume high, especially for high-margin brands such as Audi. According to VW, 43% more customers in China bought an Audi between January and September last year compared to 2011 and imports were up 89% to nearly 58,000. However, Stürmer said that vehicles imported from Europe have lower margins as they are subject to high import tariffs and the “crucifying” pr ice competition that currently defines the Chinese market, although such a strategy appears to work well in China for luxury vehicles.

“In a way, such a scheme would mean a subsidising of European factories out of China, which is how global car manufacturers should be operating – offsetting the problems in one region with positive results from other areas,” said Stürmer (although not everyone would agree with this).

According to Stürmer, even before Winterkorn’s announcement, IHS was forecasting that VW could be exporting more than 200,000 cars from Europe to China each year from 2013-2015, more than half of which would come from Germany, and another major part from Slovakia, where the group’s factory also produces Skodas. VW is beginning Skoda exports to China in 2013.

“It seems that VW is now trying to sell their slow capacity build-up as a sign of loyalty towards the European factories – pretty smart,” said Stürmer.

The ‘loyalty’ pitch – intended perhaps to create a positive image for the company in Europe and Germany – may have been sold further in the percentage of investment VW has allocated its German factories. Winterkorn said VW will invest €50.2 billion ($65 billion) in its automotive division over the next three years – an acceleration on earlier plans.

In China, VW’s joint ventures will invest a total of €9.8 billion in new production facilities and products in the period between 2013 and 2015, on top of the €50 billion. The group will also invest, together with the joint ventures, some €14 billion in product development in China.

Clearly it is not a question of one or the other: German and European exports, as well as Chinese production, will play a major role in the group’s goal of surpassing Toyota and GM by 2018 or before.