Volkswagen Group will invest almost EUR29bn over the next three years to enhance productivity and launch additional new models. Around EUR21bn of this will be capital investment.
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VW chairman Martin Winterkorn announced the investment at the end of last week, adding that more than half the capital investment will be in Germany. The group’s capital expenditure ratio will be around 6% a year between 2008 and 2010, up from what Volkswagen described as “the relatively low figure achieved in recent years”.
EUR13.8bn will be spent modernising and expanding the current product range, and introducing new more efficient gasoline engines. The diesels will all be converted to common rail technology, while capacity for automatic gearboxes will be increased.
EUR7.1bn will be spent on ‘cross-product’ investments. This will include assembly lines, press shops and paint shops to help meet the quality and cost targets for new models. Part of the investment will be in new plants in Russia and India.
The group’s Chinese joint ventures are not included in the consolidation. These companies will invest a total of EUR2.1 billion in the period from 2008 to 2010.
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