Billion investment planned: VW returns to profitability in Latin America

VW expects in Latin America a positive result for the first time since 2013 – despite Corona and the semiconductor crisis. In the next five years, the brand intends to invest around one billion euros in order to “further strengthen its competitive position in this important market and to position itself profitably over the long term,” as the manufacturer announced. In addition to other local vehicle projects, digitalization and decarbonization in South America in particular should “receive an additional boost”. This also includes the continued operation of a research center for bio-fuels “as a market-specific bridging technology in addition to Volkswagen’s global electrification offensive”.

VW brand boss Ralf Brandstätter says: “Latin America is an important future market for Volkswagen. With a very consistent restructuring program we have developed a very good starting position there over the past two years. We are now driving the implementation of our ‘ACCELERATE’ strategy with a large investment program. advance, strengthen our competitive situation in the region and become sustainably profitable. “

“A very important milestone”

VW attributes the return to profitability in Latin America primarily to the following factors: fixed cost reductions and capacity adjustments in the six plants in the region as part of a restructuring program, as well as the model offensive and revision of the model program launched in 2017.

Alexander Seitz, CFO of Volkswagen, said according to the announcement: “The expected break-even point in Latin America is a very important milestone on the way to sustainable, competitive profitability for Volkswagen.”

Volkswagen intends to continue the strategy of a product portfolio tailored to the needs of the region in Latin America with the market launch of a new compact car family for the entry-level segment from 2023. The first model is the Polo Track, which is based on the MQB platform and is to be produced in the Brazilian plant in Taubaté.

VW Polo Track: First model of a new compact car family in Latin America. (Photo: Volkswagen)

Align “with the specific conditions of the market”

With additional investments in Latin America, VW is also focusing on “the transformation to a software-oriented provider of sustainable mobility”. VW wants to align itself “with the specific conditions of the market” and invest in the existing research and development center for the use of bio-fuels. VW announces: “Especially in regions with long distances, little developed charging networks and a lack of regenerative energy sources, biofuels with a positive CO2 balance can build a bridge into the electric age.”

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Lenny Li

I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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