German carmaker Volkswagen AG‘s new investment cycle in Brazil has finally come into final. No specific amount of investment is mentioned as of yet. The company plans to announce more details about the investment later in the year.
Through an interview with Reuters, Volkswagen’s CEO for South America, Pablo Di Si, explained, “We have defined (the investment) and we already stopped production at our factory in Taubate to prepare the new platform”.
Di Si refused to reveal any other specific information. Di Si further added that the global CEO of Volkswagen Passenger Cars Ralf Brandstätter will disclose the details on the investment somewhere around this year.
One thing for sure is the new investment cycle will replace the one from 2016 involving a 7 billion reais commitment ($1.34 billion). The cycle was supposed to end last year. The coronavirus pandemic hit, however, stretched out the timeline.
Volkswagen’s future plans
According to Reuters, Volkswagen has exceeded General Motors Co in becoming the best-selling brand in Brazil this year. This is mainly because GM Motor’s struggle with its production in Brazil due to the global chip shortage.
Volkswagen’s factory in Taubate currently manufactures the brands’ two compact cars, the Sedan Voyage and the hatchback Gol. As of now, the company provided no information whether these two models will be upgraded or replaced.
Volkswagen has been showing its interest in large cars like SUVs and pickup trucks. Demand shift from the consumers is one of the causes. Furthermore, it is likely that larger vehicles could bring in higher profitability. Other automakers around the world have also started to focus on large cars development.
“It’s a trend that will only accelerate,” Di Si said. “It’s not that the entry-level segment will disappear, but one sees how the segment is becoming drastically smaller,” he added, as quoted from Reuters.
Read also: Hyundai Reports Threefold Profits for Q1
Follow and join us on Youtube, Instagram, Facebook, and Twitter to be part of the trader community in Asia
