BERLIN, April 11 (Reuters) - Volkswagen announced on

Thursday plans to invest 2.5 billion euros ($2.68 billion) in

China to expand its production and innovation hub in the city of

Hefei in Anhui Province.

Preparations are also being made for the production of the

two Volkswagen brand models being developed together with

Chinese partner XPENG ( XPEV ) to begin in 2026, it said.

Ralf Brandstaetter, Volkswagen Group's management board

member for China, said the Hefei site would help bring

technologies to market around 30% faster as the carmaker boosts

electric vehicle production there.

Volkswagen ceded its title of best-selling car brand in

China to local EV manufacturer BYD in late 2022 and

has announced a series of new models to electrify its portfolio

in China as it battles to regain ground.

($1 = 0.9320 euros)

(Writing by Rachel More, Editing by Victoria Waldersee, Editing

by Madeline Chambers)