VW Chooses Mexico for $550M Engine Plant

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Volkswagen announced that it will invest nearly $550 million in the first stage of construction of a new motor plant in Silao, Guanajuato in Mexico that will create 700 direct jobs.

This is the second Volkwagen factory in Mexico, the first being located in the state of Puebla. Construction will begin in October as part of the company’s growth strategy for North America. By 2013, it is expected to be working at full capacity, producing 33,000 latest-generation engines to supply the Mexican and U.S. markets. Volkswagen’s investment in Mexico was announced at a ceremony held at the official Los Pinos residence, led by President Felipe Calderón Hinojosa, Otto Lindner, President of the Executive Board of Volkswagen, Mexico and Juan Manuel Oliva Ramírez, Governor of the state of Guanajuato.

The new Volkswagen plant in Silao will produce new generation components to supply the assembly plants in Puebla and Chatanooga, Tennessee. The Puebla Factory currently produces the Jetta, Golf, SportWagen and New Beetle models. Production of a new medium-sized sedan will begin in Chatanooga, Tennessee as from 2011.

In 2009, the Volkswagen Group sold 6.3 million vehicles worldwide. In 2009, it invested approximately $4.2 billion in research and development, primarily to reduce the environmental impact of its productive processes. This is reflected in the new motors to be produced in Silao that meet the most stringent contaminant emission norms. They reduce carbon dioxide pollution as well as significantly improving their fuel consumption efficiency.

Volkswagen began operating in Mexico in 1964 when it produced the first sedan at its Puebla factory. In 2008, it opened its Tennessee factory and in 2010, it will begin construction of its Silao, Guanjuato factory, which marks a historical milestone since it is Volkswagen’s first investment outside Puebla, one of its largest factories worldwide.

Worldwide, Volkswagen has 66 production plants and commercializes its automobiles in 153 different markets under the following makes: Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda and Volkswagen Commercial Vehicles. It also offers financial and insurance services for its products.

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