German automaker Volkswagen AG is to invest US$500 million this year and next to launch production of its Cabrio and Concept One car models in Mexico. The auto group, which already operates a major assembly plant in Puebla, Mexico, is preparing to offer parts and other subcontract business worth $240 million in the next few months to suppliers in Mexico, according to Bernd Leissner, president of Volkswagen de Mexico SA de CV.
Leissner announced VW's spending plan as the group officially launched production at the Puebla plant of the Cabrio, destined largely for U.S. and Canadian markets. Germany is the only other country where the model is assembled.
VW is to begin production of Concept One, its new Beetle model, in Mexico next year, initially with 100,000 units annually. The car is to be exported throughout the world.
VW remains the chief car supplier to Mexico's recession-dented domestic industry, according to the country's trade and industry secretary, Herminio Blanco.