The Truck & Bus unit of Volkswagen group will invest EUR 420 million in new products and production modernization in Brazil over the next five years, the company said on Thursday.
The investments will be directed to the company’s plant in Resende (RJ) and the development of connectivity services.
“I am confident that the Brazilian economy is reaching the bottom and will recover in the next few years,” Andreas Renschler, president of the Volkswagen Truck & Bus division, said in a statement.
The amount of 420 million, foreseen for the period from 2017 to 2021, represents the largest investment cycle in the unit’s two-decade history. The previous cycle involved resources of up to 280 million EUR.
The funds will come primarily from the results of the operation itself, “which relies on the recovery of Latin American markets,” the company said in a press release.
The Volkswagen line of trucks and buses developed in Brazil is exported to more than 30 countries in Latin America, Africa and the Middle East.
Sales of trucks in Brazil are down 31 percent from January to October at 42.3 thousand units, while bus sales are down 32 percent to 9.9 thousand units.