Volkswagen’s Supervisory Board has approved a cash influx of €62.4 billion (US$86 billion) into its automotive division over the course of five years. The investment is necessary if VW’s plan to overtake GM and Toyota and become the world’s number one car manufacturer is to succeed.
“The Volkswagen Group is investing a record amount in forward-looking projects to achieve its goal of becoming the world’s best automobile manufacturer”, said the VW Group’s CEO, Prof. Dr. Martin Winterkorn. “We shall continue to extend our innovation and technology leadership. Top of the agenda for us are investments in environmentally friendly, sustainable models and drives.”
The majority of this investment, €49.8 billion (US$68.6 billion), will be in property, plant and equipment, with more than half invested in Germany. VW and its brands will focus on new vehicles on almost all classes, which will be based on modular architectures and use common components, allowing the cost-efficient continuous launch of models and expansion in new segments.
VW’s record spending to outsell GM and Toyota does not include its Chinese operations. The Group’s two joint ventures, Shangai-Volkswagen Automotive and FAW-Volkswagen Automotive, will receive a further €14 billion (US$19.3 billion) from 2012 to 2016 for the construction of two more plants.
This brings VW’s factory count in China to 11, out of the 62 that it has globally. “We are rather undersupplied there”, commented Winterkorn, who estimates that the VW Group could sell more than 2.4 million units this year in China.
After a best-ever 7.2 million units in 2010, VW Group estimates that this year it will increase its sales by 5% this year.
