Volkswagen to invest EUR3.4 billion in Brazil for model, plant upgrades

Article by Anita Panait, on October 24, 2012

Volkswagen will invest up to EUR3.4 billion ($4.4 billion) to upgrade its model lineup and plants in Brazil.  According to VW chief executive Martin Winterkorn, the investment is part of the carmaker’s goal to become the world\'s biggest carmaker by 2018, noting that Brazil is a cornerstone of the Strategy 2018.

The carmaker’s investment plan in Brazil runs through 2016 and includes an investment of EUR126 million at its component factory in Sao Carlos in a bid to increase output to 4,800 engines a day from the current 3,800. VW hopes its strategy in Brazil could help it offset the dwindling demand for vehicles in Europe.

However, VW is not without rivals in Brazil as the other carmakers from Asia and the United States are also making their moves in the South American country. According to IHS Automotive, vehicle sales in Brazil are expected to jump by 8.6 percent this year.

Michael Macht, VW production chief, said that the German carmaker’s investment in Brazil will involve standardizing factories and installing technology to produce vehicles based on its MQB platform, the same architecture that underpins the VW Golf and other models. Macht remarked that he sees enormous potential in Brazil just from the systemic implementation of parts sharing.

Topics: vw, brazil, investment

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