Volkswagen to Invest $106 Billion Over Next 5 Years

By Robert Waldner on 22 November 2014
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DSC_0458The Volkswagen Group announced plans to invest €85.6 billion ($106 billion) into new models and innovative technology, as well as to increase its global presence. Approximately two thirds of the investment will go towards increasingly efficient vehicles and more environmentally friendly production.

The announcement came following a meeting of the company’s board of supervisors on Friday.

“Development costs will remain high in the future as a result of high innovation pressure and increasing demands on the automotive industry from CO2 legislation,” said VW CEO Martin Winterkorn in a statement.

More than half of the capital spending will be used for plants in Germany, where VW has 28 locations.

The automaker will use €64.3 billion to invest in property, plant and equipment, investment property and intangible assets, excluding capitalized development costs. The plans will include capitalized development costs of €21.9 billion and proceeds from asset disposals of €0.6 billion.

Volkswagen will also use €41.3 billion to modernize and extend its product range for all of its brands, focusing mainly on its range of SUVs.  It said it will also launch a new generation of engines that will enhance the performance, fuel consumption, and emission levels of its vehicles.

Other planned investments include a new Audi plant in Mexico.

(Photo: Accura Media Group)