Volkswagen Mexico has said it will start producing a new model at its plant next year, as it invests US$1bn to expand the site, but a company spokeswoman declined to say which model.
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The investment at its key Mexico plant, which produces Jettas, Boras (the ‘Mark IV’ Golf-based model is still sold in Canada as the Jetta City alongside a similar Golf) and New Beetles, comes as carmakers around the world face slumping demand due to the economic downturn.
“The production of the new model will start in March or April of 2010,” spokeswoman Consuelo Minutti told Reuters.
Before the global financial crisis hit its worst last year, the German company said it would invest $1bn in Mexico between 2008 and 2010, without specifying how it would spend the money.
Volkswagen’s investment is a vote of confidence about the future of Mexico’s auto industry, which accounts for a fifth of the country’s total manufactured exports.
A slide in US demand has thrown Mexico into its steepest recession since at least the 1995 slump that became known as the Tequila Crisis.
Minutti declined to say which car Volkswagen would add to its line-up at the plant in the central state of Puebla, the company’s only North American facility and the sole producer of the popular New Beetle model.
Volkswagen is Mexico’s second largest automaker, sending most of its cars to the United States, Canada and Europe.
But falling demand forced the company to slow VW’s Mexican production in June by 22.7%, year on year, to 30,947 cars, according to the country’s automaker association.
