Volkswagen is to invest $US2 billion in Mexico by 2008 to produce new models of its Golf and Jetta cars for the North American market, as it bets US demand will pick up, Reuters reported.
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The company will also invest part of the money into production of the Bora, the European version of the Jetta, Reinhard Jung, president of the executive committee of Volkswagen Mexico, told the news agency.
Volkswagen has previously said it will shift Bora production from Germany to Mexico when the redesigned model, based on the platform of the recently-launched ‘Mark V’ Golf hatchback and Touran minivan, is introduced in 2005.
According to Reuters, low demand resulting from weak global economic conditions has hurt Mexican car production in recent months – the country sends 80% of output to the United States, its main trade partner.
Jung told the news agency VW expects 2004 Mexican production of 250,000 units, 11% below the current year’s expected output of 280,000, and anticipated production could reach 440,000 units in 2005.
Volkswagen sole Mexican assembly plant in Puebla state also makes the New Beetle, which is exported to 80 countries, Reuters said.
