VW Betting On Brazil With T-Cross Production

Volkswagen has confirmed that it will build the T-Cross SUV in southern Brazil despite a recent downturn in the country’s manufacturing industry.

The German automaker will invest 2 billion reais ($595 million) to construct the T-Cross at its Sao Jose dos Pinhais plant in Brazil. This move is just part of a wider 7 billion reais ($2.1 billion) investment through 2020 to refresh its line-up in Brazil. Volkswagen’s calls it the “largest product launch offensive ever” in its local history.

Despite Volkswagen’s belief in the Brazilian market, Honda isn’t so convinced and says it will consolidate all vehicle production in its Itirapina plant. This will include converting a factory in the Brazilian city of Sumaré from vehicles to engines and parts, Reuters reports.

Honda intended on its Itirapina plant helping it to double production capacity in Brazil in the midst of booming domestic production. However, a press officer confirmed that the downtrun in the country altered with these plans.

When it launches, the VW T-Cross will use the company’s MQB platform, also used by the Polo. As such, the compact SUV will share some parts with the Polo and Seat Arona and act as a direct rival to the Nissan Juke and Peugeot 2008. It will slot below the T-Roc in Volkswagen’s range of SUVs.

Sales of the T-Cross are tipped to start by the end of the year.