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Volkswagen grapples with 1.7 million global recall focused on China

A woman and a child look at cars of German carmaker Volkswagen in a shop of a VW dealership in Hamburg, October 28, 2013. Volkswagen is due
A woman and a child look at cars of German carmaker Volkswagen in a shop of a VW dealership in Hamburg, October 28, 2013. Volkswagen is due

BERLIN (Reuters) - Volkswagen is beset with a large global vehicle recall as Europe's biggest carmaker steps up efforts to surpass Toyota <7203.T> and General Motors in the quest for the top sales spot.

Wolfsburg, Germany-based VW is recalling almost 1.7 million cars, sport-utility vehicles and pick-up trucks worldwide, about half of which are in China, the carmaker's biggest market.

The company's China division said on Thursday that 640,309 vehicles will be recalled from November 25 to change the oil in a number of 7-speed double-clutch gearboxes, without specifying the models affected.

The recall comes a day after China's quality watchdog announced that 207,778 Tiguan compact SUVs, one of VW's three best-selling models globally this year, will be pulled off the world's biggest car market.

"We sincerely apologize to our customers for any inconvenience caused," VW Group China said. "We will do our utmost to serve our customers efficiently and in the shortest time possible."

VW has been pushing rapid growth in China where it aims to double manufacturing capacity to over 4 million cars per annum by 2018, the year it wants to snatch the global sales crown.

Separately, VW's German headquarters said on Thursday that about 800,000 Tiguans assembled between early 2008 and mid-2010 are being recalled for risks of a partial malfunctioning of lights.

The multi-brand group also said on Thursday that it's recalling 239,000 models of its Amarok pick-up truck worldwide for possible leaks in fuel lines. The action affects models built between 2010 and June 2013.

VW doesn't sell the Amarok in China, a spokesman said.

At the heart of VW's global aspirations is a strategy to expand modular production to boost the proportion of parts that can be shared among models and brands, allowing the company to build cars more rapidly and at lower costs.

Analysts have said the strategy isn't without risk and could expose VW to the threat of massive recalls if a single part, used in millions of cars, fails.

China's quality watchdog said the recalls will include VW's imported cars, such as Scirocco, Golf Variant, Golf Cabriolet and the Beetle, as well as those made at its two Chinese joint ventures with FAW <000800.SZ> and SAIC Motor Corp <600104.SS>.

FAW will recall the Bora, Golf, Sagitar and Magotan and Shanghai Volkswagen will recall the Touran, Lavida, Superb, Octavia, Passat and Polo.

(Reporting by Andreas Cremer and Shanghai newsroom;Editing by Elaine Hardcastle)

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