German automaker Volkswagen AG is planning to reduce oil consumption and emissions by 20 percent in all its Chinese-made cars by 2010.

Winfried Vahland, chief executive officer of Volkswagen China, made the announcement on Friday at the production launch of an engine plant in Dalian, northeast China's Liaoning Province.

The new plant, a joint venture between Volkswagen and the Chinese automaker FAW, was built to produce turbo direct injection gasoline engines in order to "introduce the newest-generation engines into China".

Volkswagen also planned to introduce the latest technology for automatic gearboxes and light auto parts into the country.

China became Volkswagen's fastest growing market last year with annual sales soaring 24.3 percent to 711,000 units.