Tuesday, November 26, 2013

VW Group Pledges to Invest €84.2 Billion in New Models and Technologies by 2018

The Volkswagen Group has announced a total investment of €84.2 billion ($113.85 billion) in its Automotive Division between 2014 and 2018, with over two-thirds of the amount to go into the development of efficient vehicles, drives and technologies, as well as environmentally friendly production.

Of the total amount, €63.4 billion ($85.7 billion) will be invested in property, plant and equipment, with average annual investments in this area to be around €0.5 billion ($0.67 billion) less than in the previous planning. VW says this is due among other things “to the postponement of construction projects and capacity optimization.”

€41.2 billion ($55.8 billion) of the total amount to be invested in property, plant and equipment will go to the Automotive Division for modernizing and extending the product range for all its brands. Obviously, the focus will be on new vehicles and successor models in almost all vehicle classes, all of which will be based on the modular toolkit technology and related components.

Investments are significant in powertrain production as well, with VW switching to Euro6 engines and to new generations of powerplants. A particular attention will be given to hybrid and electric motors.

More than half of the investments in property, plant and equipment (almost 60 percent) will be made in Germany, with VW sending a strong message that its home locations will continue to play a key role in the company.

Europe’s largest carmaker will also make cross-product investments of €22.2 billion ($30.1 billion), including spending to expand capacity, in press shops and paint shops, development, quality assurance, sales, genuine parts supply and information technology.

VW’s plans also include capitalized development costs of €19.5 billion ($26.4 billion) and other investments including for financial assets amounting to €1.3 billion ($1.75 billion).

By Dan Mihalascu



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