It’s the largest-ever investment package in Volkswagen’s history for new models, environmentally friendly technologies and production facilities – the VW Group is set to invest more than US$85 billion (62 billion euro) in its automotive division into 2016 as it continues its march towards becoming the world’s leading automaker.
Investments in property, plant and equipment will account for around US$68 billion, with 57% of this in in Germany alone. Of the amount, US$44 billion will be used on modernising and extending the product range for all its brands. The main focus will be on new vehicles and successor models in almost all vehicle classes, allowing the company to systematically continue its model rollout with a view to tapping new markets and segments, though powertrain movement is also on the cards, with new generations of engines – offering additional enhancements to performance, fuel consumption and emission levels – set to come about. In particular, development of hybrid and electric engines is a focal point.
The joint ventures in China are not consolidated, and are separate to the above figures. In China, the Group is set to invest US$19 billion through 2016. The investment includes spending for a batch of new models and two new assembly plants that have already been announced.
There may yet be a need to add to those two factories being built, according to reports – currently, VW already has 11 plants in China, yet with 1.9 million units sold in the country last year and a solid projection that sales could climb to 2.4 million units this year, additional plants may be needed to keep up with the ever-increasing demand.