Volkswagen AG's truck division is investing $US131 million (120 million euros) in a new paint plant to help increase production at its main Hanover, Germany, factory, Bloomberg News said.

The plant is being built in Stoecken, near the Hanover truck factory, Bloomberg News said, citing a VW statement. The car maker did not say when the plant would begin operating.

Bloomberg News said that Wolfsburg, Germany-based Volkswagen plans to introduce a new line of commercial vehicles starting this year and expects sales to increase.

The division, which has said it will add 500 jobs, has been hurt along with rivals by weak demand for trucks and utility vehicles in its main markets, the report added.