Sales in China rose 12.5 percent to 1.02 million in 2008, compared with 1.06 million in Germany, Volkswagen's biggest market. Last year, the company said held a market share of 18 percent in China, including Hong Kong.

Volkswagen entered China in the mid-1980s, before its biggest competitors, and long dominated the market with its Santana and Audi models. It once claimed a market share of over 50 percent, but in recent years has ceded ground to an onslaught of competition from international and domestic rivals.

The company has two joint ventures in China -- one with the state-owned China FAW Group, or FAW-Volkswagen Automobile Co., and one with SAIC Motor Corp., Shanghai Volkswagen Automotive Co.

Volkswagen intends to double its sales and retain a leading position in China despite the current difficult business climate, Vahland said in introducing the company's 'Strategy 2018.'

'We have defined a plan to face these challenges and take all opportunities,' Vahland said, without giving any details on plans for new investments.

Despite the upbeat plan, Volkswagen's China sales fell 11 percent to 83,900 vehicles, the company recently reported.