Volkswagen Brazil hopes to sell 1m passenger cars and light commercial vehicles here by 2014. It also exports and has factories with current annual capacity totalling about 850,000 units. Argentine output and imports will not help: augmenting capacity will be a must.
This year, therefore, 60% of local investment will focus on facilities and more shifts. The São Bernardo and Taubaté units, in the state of São Paulo, face high labour costs (50% more than Fiat’s plant in Betim, state of Minas Gerais, for example), but gain on logistics. Both are likely to get the investment nod with the third, in the state of Paraná, remaining on standby.
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Local VW president Thomas Schmall said the Brazilian automaking industry would be challenged by new players and a rise in imports in the next few years.
“I am considerably more concerned about the Koreans than the Chinese”, he said.
Volkswagen’s Brazilian expects positive financial results for 2009, the third year in a row. The German parent company will shoulder 40% of the US$3.5bn investment approved for the 2010-2014 period, another 36% will come from Brazilian national bank BNDES and the rest from other sources.
The automaker expects to see a boost in export sales to Mexico and Argentina this year but the launch of new products in Brazil is the priority. Of the total invested by 2014, 60% will have been in new products and 40% to expand facilities.
