VW Group mulls setting up planning center in Brazil

Article by Christian A., on July 28, 2014

Volkswagen Group is mulling establishing a planning center in Brazil as part of its bid to turn around a slump in sales in the country, sources told Reuters. VW has seen its sales drop 18 percent in the first half to 271,700 units. In 2013, VW saw its deliveries fall 13 percent.

The so-called development and planning center should allow VW to make sure that offerings better suit the needs of customers in Brazil, two sources privy with the matter told Reuters.

VW plans to make a EUR3.6-billion ($4.85 billion) investment on new models, plants and technology in Brazil through 2018, as part of a broader push to revive its slumping performance both in South and North America.

A VW spokesman, however, denied the plans. VW recently disclosed that it plans to establish a planning center at its Chattanooga site in Tennessee, to help reverse its fortunes in the region. The new center will house around 200 engineers who will be tasked to observe the US market closer while the carmaker overhaul its offerings at a faster pace.

The VW has seen sales of its namesake brand drop continuously in the US following a hike in 2011 and 2012. Such predicament greatly risks the German group’s aim to become the largest carmaker in the world.

VW brand logged a 13-percent drop in deliveries in the US to 179,000. Brazil’s slowing growth, however, has failed to dim hopes that it would soon recover. In fact, Audi is planning to invest EUR150 million commence production in 2015 in Sao Jose dos Pinhais. BMW is also investing EUR200 million at its Santa Catarina site to begin output later this year. [source: automotive news - sub. required]

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