Volkswagen plans to spend US$118m to expand its new engine plant in Silao, Guanajuato, to make components for new versions of its EA 888 engines.

Civil engineering work will begin immediately and production of the new motors is slated for the first quarter of 2016, the company told Reuters.

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The $550m Silao plant opened in January and has an annual capacity of 330,000 engines.

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