VW will launch the e-Golf and an assortment of other battery-based vehicles in China.

Volkswagen stoked the competitive fires today in the race to become the top auto brand in China by announcing plans to invest $2.7 billion to build two plants in the country.

The investment is in addition to the previously announced plans to plow about $27 billion into the country by 2018. VW last year nudged past archrival General Motors to become the largest automaker in China.

“China has become our largest and most important market,” said Prof. Dr. Martin Winterkorn, chairman of VW’s board of management. “To satisfy the demands of our customers in the country, we are engaging in a further substantial expansion of our capacities in China together with our Chinese partner FAW Volkswagen.”

The two new plants will be built in Qingdao in Shandong Province and Tianjin, both cities are on the East coast of China. Aside from the fact that both cities have the infrastructure necessary to accommodate the facilities, Tianjin is the location of a new production plant for dual-clutch gearboxes for Volkswagen in China that is due to be inaugurated at the end of 2014.

VW’s move to the top of the sales heap in China is important as the China’s the largest automotive market in the world…and growing. Actually, it’s been growing for VW as well this year. The company’s sales through May were up 17.7% percent, the maker said.

Working in concert with its Chinese partner, FAW, Volkswagen has plants in Chengdu, southwest China, Changchun, northeast China, and Foshan, south China. With the other joint venture, Shanghai Volkswagen, the Group operates vehicle plants in Shanghai, Nanjing, Yizheng, Ningbo and Urumqi, and is constructing a new plant in Changsha, opening in 2015.

(New S-Class Coupe to maintain Mercedes high-tech push. For more, Click Here.)

Much of the investment will come from models meeting the country’s ever-more-restrictive emissions requirments. Right now, VW has 17 vehicles in its stable that meet the current mandates; however, the rules are expected to get tougher, which is why the company plans to make big push with electric vehicles.

(Click Here for details about Spyker’s latest financial problems.)

The Chinese government has told automakers it would like to see as many as 5 million EVs on the road in China by 2020 and VW is just one of many carmakers showing off electric vehicles at the 2014 Beijing International Automobile Exposition.

The pressure from the Chinese government, which is hoping to reduce the worsening air pollution blanketing cities such as Beijing, is pushing the industry to go electric as rapidly as possible. Volkswagen’s German rivals, Mercedes-Benz and BMW, are also making major investments in EVs in China, as are General Motors and Nissan.

(To see more about Chevy’s sponsorship deal with Man United, Click Here.)

VW and its two joint venture partners, FAW Volkswagen and Shanghai Volkswagen, already employ over 2,700 engineers in China, many of them dedicated to EV development.  Meanwhile, the maker plans to add more than 20,000 new skilled jobs in China over the coming years as it attempts to shore up its position as the market’s sales leader.

In addition, VW’s dealer network will grow by 50% from roughly 2,400 dealerships to over 3,600 sales “partners,” company officials said.

For 2014, noted Winterkorn, VW is aiming for double-digit growth in China that could yield sales of over 3.5 million vehicles for the first time in a calendar year.  That would give a significant push for the maker’s ambitious goal of selling 10 million vehicles around the world this year.