November 28, 2007 -- The Brazilian unit of German carmaker Volkswagen AG (VW), Volkswagen do Brasil, will invest 123 mln Brazilian reais ($70.4 mln/48.2 mln euro) to increase the daily production of its engine plant in Sao Carlos, in the southeastern Sao Paulo state, Volkswagen do Brasil said on November 28, 2007.

The plant's output will be increased to 2,700 units per day in September 2008, compared to the current 1,800.

Of the sum, the company will allocate 80 mln reais ($45.8 mln/31.3 mln euro) for the expansion of the plant. The remaining 43 mln reais ($24.6 mln/16.8 mln euro) will be destined for the purchase of equipment.

The project will create 200 jobs. After the completion of the project the plant will become the fifth biggest engine plant of VW in the world.

The engines made in Sao Carlos are supplied to Volkwagen's plants in Sao Bernardo do Campo, Taubate and Sao Jose dos Pinhais. Also, 16.5 pct of the engines are exported to South Africa, Spain and Argentina.

In the ten months ended October 2007, the plant produced 460,000 engines, 75,000 more than in the same period of 2006.

The plant is seen to close 2007 with 558,000 engines produced, or a 22 pct year-on-year growth.

By 2011, VW will invest 3.2 bln reais ($1.832 bln/1.253 bln euro) in Brazil, Volkswagen do Brasil said.

Source: O Estado de Sao Paulo (AG/IM/AG)

Source: Latin America News Digest