Volkswagen do Brasil has won the contest between various company factories world-wide to produce a new compact car for Europe and Asia, writes Rogério Louro.

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The deal to build the new model, dubbed Project 249, was sealed on Monday with a telephone call from Volkswagen do Brasil president Paul Fleming to Brazil’s president Luiz Inácio Lula da Silva.


Fleming told the president that Volkswagen AG had selected the São Bernardo do Campo plant, in São Paulo state, to make the new model for export, beating off bids from plants in Portugal, Spain and Slovakia to produce Project 249 for the European market and probably Asia-Pacific territories as well – though that is yet to be finally confirmed.


Volkswagen do Brasil will, in fact, make the new car in two plants. Brazilian-market versions will be assembled from the end of this year in the the São José dos Pinhais plant, in Paraná state while export production will begin at São Bernardo do Campo at the start of 2005.


Volkswagen would not confirm production volumes but industry sources say the initial forecast is about 170,000 export units per year.

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Project 249 is based on the current Polo platform – VW already builds the hatchback and sedan versions at São Bernardo do Campo. Like the Polo sedan, Project 249 was developed in Brazil and will be made exclusively there for all world markets.









At a ceremony to celebrate 50 years of Volkswagen operations in Brazil, Brazilian president Luiz Inácio Lula da Silva (right) signs a Project 249 bonnet specially painted with the Brazilian flag, watched by VW AG president Bernd Pischetsrieder.
Volkswagen had been evaluating factories to build the export versions of Project 249 since last year. Until very recently, the São Bernardo do Campo factory was considered to need considerable cost reductions to become more efficient compared with other factories in the VW empire so Volkswagen do Brasil put pressure on the factory’s trade unions to agree to reduce the number of employees.


After months of discussions that even included Brazil’s president (once an automotive parts worker in São Bernardo do Campo city), the unions agreed to the transfer of about 1,500 workers from Volkswagen to company parts suppliers.


Volkswagen uses a modular system to produce the Polo models in São Bernardo do Campo and seven parts suppliers occupy assembly line stations in the plant. Each is responsible for a complete set of components for the Brazilian-made Polo, including wheels (Goodyear), door trims and control panels (Faurecia), exhaust (ArvinMeritor), fuel system (Kautex-Textron), pedals set (Quasar), electrical cabling system (Kroshu-Kromberg) and front suspension, axles and rear suspension(KMAB).


The news of the successful Project 249 export deal came just weeks after a celebration held on 24 March to mark Volkswagen’s 50 years in Brazil.


During the event, Brazilian president Luiz Inácio Lula da Silva made a presentation to Volkswagen AG’s board of directors and company executives pitched their case to produce export versions of the new car at São Bernardo do Campo.


Volkswagen AG president Bernd Pischetsrieder in turn showed the Brazilian president a prototype of Project 249 while Luiz Inácio Lula da Silva autographed a bonnet for the new car specially painted with the flag of Brazil.


The subsequent co-operation from the trade unions to reduce the workforce and lobbying by the country’s president were sufficient to convince Volkswagen AG to award the Project 249 export contract to the São Bernardo do Campo plant, Brazil’s oldest car factory.


The plant, also known as the ‘Anchieta’ factory, was opened in 1957 (but not officially inaugurated until two years later). In recent years, the factory was rebuilt and modernised to produce the new Polo alongside another unique-to-Brazil model, the Gol compact, the Santana sedan and the air-cooled, rear-engined Kombi van.