VW plans to invest 3.4 billion euro to upgrade its factories in Brazil, part of its plan to become the biggest automaker in the world by 2018.
“Brazil is very much a cornerstone of our Strategy 2018,” CEO Martin Winterkorn said on Sunday in a statement ahead of the Sao Paulo motor show.
VW’s investment plan, which runs through 2016, includes 126 million euro to be spent at its component plans in Sao Carlos, Brazil, to increase production from 3,800 engines to 4,800 units. VW hopes that the Brazilian market will help it reach its goal of becoming the biggest automaker in the world by 2018.
VW’s plan is quite ambitious taking into consideration that the US and Asian automaker are also expanding in Brazil. According to IHS Automotive, auto sales in Brazil are expected to increase 8.6% by the end of this year.
Volkswagen’s investment in Brazil includes standardizing plants and installing new technology to manufacture vehicles based on the automaker’s MQB platform, the base for the Golf and other models.
“I see enormous potential in Brazil just from the systemic implementation of parts sharing,’ said Michael Macht, VW production chief.