As it marked 70 years in the region, the Volkswagen brand said it would spend EUR1bn “to make significant gains with a major product offensive”.
By 2027, the company plans to grow 40% in Brazil, the region’s largest market where 15 new electric and flex-fuel vehicle models are being launched by 2025.
Hybrids will also follow “in the medium term”.
The fully electric ID.4. and ID. Buzz will be launched this year.
In total, the South American automotive market was expected to grow 11% a year until 2030 making it one of the fastest growing markets.
Thomas Schaefer, CEO of the Volkswagen Brand said: “In recent years, the local team has achieved the turnaround and sustainably improved profitability and competitiveness. The task now is to continue working on the cost position and at the same time implementing the product offensive.”
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The region had returned to profitability in 2021 after many years and made “a significant contribution to earnings” in 2022.
The overall share of pure BEV vehicles in 2033 in Brazil was estimated at around 4% but VW aims to grow faster than the market in the segment.
All new models produced in the region will continue to be able to run on 100% biofuel.
Engines developed in Europe will be adapted in a newly opened development centre.
The A0 segment already makes up nearly 40% of the South America market and will also continue to grow disproportionately.
VW began production in Brazil 70 years ago in Sao Paulo, the first plant outside Germany. Twelve employees initially assembled parts imported from Germany.
Today, VW is Brazil’s largest automobile manufacturer, having produced 25m vehicles, 4m for export. The company develops and produces the Polo, Virtus, Nivus, Taos and T-Cross models at four plants and sells through 500 dealerships.