Volkswagen is to invest EUR1bn (US$1.4bn) in Slovakia over the next five years to boost vehicle and components production at its operations near Bratislava.

The investment will go towards setting up assembly operations for the Up! small city car which is due to go into production at the company’s assembly plant there later this year.

The Up! will be produced alongside the VW Touareg, Audi Q7 and Porsche Cayenne, plus Skoda Octavia models. According to Slovak media reports, production capacity at Bratislava will be increased to 400,000 vehicles a year after the new production line is in operation.

Volkswagen launched car production in Slovakia in 1991 and last year produced more than 188,000 vehicles there. This was down from 2007 figures, when the plant produced 249,000 vehicles.

The carmaker has invested more than EUR1.7bn in the country over the past 20 years and has become one of Slovakia’s biggest importers.