Volkswagen Group to invest €50bn

Volkswagen Group has announced a spending programme of over €50bn in its automotive division over the next three years.

As the Wolfsburg-based company continues its drive to overtake Toyota as the world’s largest auto maker by 2018, it remains committed to increasing its presence outside Europe in China, Mexico, and Russia.

It is estimated that Volkswagen will invest almost as much in plants and equipment over the next three years as Toyota and General Motors combined.

“Despite the challenging economic environment, we are investing more than ever before to reach our long-term goals,” said Professor Martin Winterkorn, chairman of Volkswagen’s board of management.

“This investment is the key to the group’s innovation and technology leadership, and enables us to further strengthen our competitive position and ensure that we are fit for the future.”

More than half of the €50bn will be invested in Germany. “We are committed to Germany as an industrial location,” Mr Winterkorn said.

“In this way, we are laying the foundations to ensure that our 27 German production facilities remain at the forefront of innovation and international competitiveness.”

Having already launched an updated version of its Golf hatchback, the firm is planning a further 40 models based on the same framework as brands such as Seat and Skoda to cut costs. It plans to invest €24.7bn in new models, which also include Audi — the only Volkswagen marque whose sales have grown in Europe this year.

In contrast, PSA/Peugeot-Citroen, is axing 8,000 jobs to cut spending. It is more dependent on Europe than Volkswagen, with the region accounting for 64% of sales in the nine months through September, compared with 42% for the German firm.