Volkswagen’s supervisory board plans to invest 33.3 billion euros in the automotive division during the period 2003-2007.

Most of the money will go into expanding and modernising the product range with what VW calls “follow-on models” [read ‘redesigned’] being introduced in all segments as well as a multi-purpose vehicle (MPV/minivan) based on the next ‘Mark Five’ Golf, a low-entry vehicle and further models to round off existing ranges.

Investment in new drive trains will see new generation low-consumption engines and gearboxes plus new technologies to comply with low-emission legislation.

Volkswagen also plans to expand, further modernise and realign its production facilities, primarily press shops, paint shops and assembly, to meet quality and productivity goals. The group also plans to further expand development activities, quality assurance, parts service and IT activities.

Product investment (i.e. investment in expanding and upgrading the product range and the associated realignment and modernisation of production facilities) will account for about 85% of the investment in the automotive division.

VW said that future investment strategy will continue to place a strong emphasis on the significance of Germany as an industrial location. Consequently, some 67% (previously 60 percent) of investment planned for the division until 2007 will be earmarked for German companies.

This increase is primarily due to upgrading models produced in Germany.

A further 2.9 billion euros will be invested in new models produced by the Chinese joint ventures to strengthen their competitiveness.

The Volkswagen Group will continue to target annual deliveries of approximately six million units over the next five years, thus strengthening its position as one of the world’s largest car manufacturers.