Volkswagen to build new engine plant in Mexico

Mexico City, Sep 23 (IANS/EFE) German automaker Volkswagen said Wednesday it plans to build a $550 million plant with annual production capacity of 330,000 engines in the central Mexican state of Guanajuato.

During an event at the Mexican presidential residence of Los Pinos, the company said the new engine plant will be located at the Puerto Interior Industrial Park in Silao, a city 353 km northwest of Mexico City that is home to other automakers’ factories.

Volkswagen de Mexico President Otto Lindner said the investment plans are part of the company’s “long-term growth strategy in North America”.

Beginning in 2013, the new Silao plant will supply next-generation engines to Volkswagen assembly plants in Puebla, Mexico City and Chattanooga, Tennessee.

Volkswagen currently produces the Jetta, Golf SportWagen and New Beetle models in Puebla and will began manufacturing a new mid-sized sedan in Chattanooga starting in 2011.

Construction of the new complex will begin next month and require total investment of $550 million, including building the site and developing the new engine.

“Volkswagen will create approximately 700 jobs over the medium term on site in Silao. In addition, further jobs will arise in the region with suppliers and in the area of logistics,” the company said in a statement.

Lindner said Volkswagen decided to install the plant in Silao because, in addition to having a qualified workforce and an already developed automobile industry, the Puerto Interior Industrial Park is situated on 150 acres of developed land with access to important roads.

“During its more than 40 years in Mexico, the Puebla assembly plant has become one of the Volkswagen Group’s largest production centres. Now a decision has been made to establish a second productive unit in Mexico, a necessary step in our growth strategy in the region,” Lindner said.

–IANS/EFE