Volkswagen says it will invest a total of EUR84.2bn (US$114bn) in its automotive division during the next five years.
More than two-thirds of the injection will be used to drive vehicle efficiency, drives and technologies, as well as environmentally-friendly production.
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“We will continue to invest strongly in our innovation and technology leadership, despite the uncertain economic environment,” said Volkswagen chairman, Martin Winkerkorn.
Investments in property, plant and equipment in the automotive division will amount to EUR63.4bn, while average annual investments in property, plant and equipment will be around EUR0.5bn less than in the planning approved in 2012 for the period from 2013 to 2015.
“In times like these, our disciplined cost and investment management will remain a cornerstone of our activities”, said Winterkorn.
The lower level of investment in property, plant and equipment is due among other things to the postponement of construction projects and capacity optimisation.
Investments in products and technologies remain unaffected by the decline. The ratio of investments in property, plant and equipment (capex) to sales revenue will remain between 6% and 7% in the period from 2014 to 2018.
The plans also include capitalised development costs of EUR19.5bn and other investments including financial assets of EUR1.3bn. The company says the increase in capitalised development costs as against previous planning, is due to investments in connection with the Group’s CO2 targets.
More than half of the investments in property, plant and equipment, almost 60%, will be made in Germany. “The amount being invested in Germany is a strong testament to the fact our home locations will continue to play a key role in the globally positioned Group going forward”, said Winterkorn.
“At Volkswagen, we are clearly committed to Germany as a manufacturing and development location. At the same time, we are also stepping up our investments in the markets outside Europe to further increase our global presence and capability.”
At EUR41.2bn, or 65%, the Group will spend a large proportion of the total amount to be invested in property, plant and equipment in the automotive division on modernising and extending the product range for all its brands.
The main focus will be on new vehicles and successor models in almost all vehicle classes, which will be based on modular tool-kit technology and related components.
The high level is due among other things to upfront investments relating to the changeover to Euro 6, which the automaker says means “completely revamping” the Group’s range of vehicles and engines.
In the area of powertrain production, new generations of engines will be launched offering enhancements to performance, fuel consumption and emission levels. In particular, the Group says it will continue to press ahead with the development of hybrid and electric motors.
In addition, the company will make cross-product investments of EUR22.2bn during the next five years, including spending to expand capacity. Other investment focuses are press shops and paintshops.
Investments outside production are mainly planned for areas of development, quality assurance, sales, genuine parts supply and information technology.
The joint ventures in China are not consolidated and are therefore also not included in the figures. They will invest a total of EUR18.2bn in new production facilities and products from 2014 to 2018.
These investments will be financed from the joint ventures’ own funds.
