Volkswagen to invest new plants and models

According to report of SOHU in November 26th, the business division of Volkswagen Group will invest 25.8 billion euros in the next three years, among which 19.9 billion will be used for factory land, plant and equipment. General speaking, the investment in Germany will account for half of the whole.

Thus, it can be concluded that investment in the local market is still a top priority. In the total investment, except for the part will be used for factory land, plant and equipment, there are still 5.9 billion euros is for capital-oriented development. The Supervisory board of Germany Volkswagen Group has held a meeting recently to discuss the investment plan from 2010 to 2012 and made the above arrangement.

Chairman of the Board Directors of Volkswagen Group, Prof. Dr. Martin Winterkorn) said, “The automobile industry is facing great economic and technical challenges. Volkswagen will actively promote its long-term growth strategy by investing in green cars, innovation technologies and new plants. Our investments will continually have focuses in the future.”

Chairman of Volkswagen joint labor and capital management committee, Bernd Osterloh stressed, “These investments are the base to ensure the job security of our employees and further development of our global plant facilities. Only to invest today, tomorrow the best products may be provided. This is exactly a common focus of the Board of directors and staff of Volkswagen Group.

Spending 13.3 billion euros, which is more than half of the total amount of capitals on the factory land, plants and equipments Volkswagen Group is aimed at further expansion of product lines and making it more modern. The emphsis of the R & D is to develop new models, successor models and modified models among all models in base of multi-brands and modular platform strategy. Then Volkswagen will implement a systematic plan to develop its new models, and strive to break into new markets and market segments. In the powertrain area, Volkswagen will launch a new generation of engines with better performance, less fuel consumption and emissions. Besides, the capacity of Automatic transmission will also meet the growing demands.

In addition, Volkswagen will invest 6.6 billion euros for the development of cross-product technologies in the next three years. In order to achieve the goal of high-quality and low costs of new product, it is necessary to modify the stamping / painting and final assembly facilities. Besides investments in production facilities, it will also focus on aspects such as research and development, quality assurance, original components supply and information technologies. New plants in North America are under construction and expected to be operational by 2011. The production of new plants in Russia and India are continuing to increase, ensuring that local production of vehicles can meet the growing demands of these emerging markets. Adding the upfront investment in new products, powertrain and manufacturing equipments, from 2010 to 2012, the rate of capital expenditures on the factory land, plant and equipment to sales revenues will be an average of 6%, which is a very competitive figure.

　　Background:

　　The figures of Chinese JV are not included in the above statistics. From 2010 to 2012, the investments in these JVs will reach 4.4 billion euros.(Translator: Yalong/ Jessie)

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