VW Group to invest Rs 656,124 crore in new models, eco-friendly tech and global presence between 2015-19

Over the next five years in the Automotive Division of the Volkswagen Group invested a total of euros 85.6 billion (Rs 656,124 crore) in new models, innovative technologies and its global presence. About two-thirds of the total investment will flow more efficient vehicles, drives and environmentally friendly production. 

The investment ratio remains at a competitive level between six and seven percent and will see over half of the capital investment in Germany while the Chinese joint venture will invest euro 22 billion (Rs 168,630 crore in the years 2015-2019), that works out to nearly Rs 92.40 crore a day over five years.

These financial numbers are the result of investment planning for 2015 to 2019, the Board discussed at its meeting on November 21 of the Supervisory Board of Volkswagen Aktiengesellschaft."We continue to invest in the future to be the ecologically and economically leading automotive company – with the best and most sustainable products," said Prof. Dr. Martin Winterkorn, CEO of Volkswagen AG, Wolfsburg, adding: "The high pressure to innovate and increasing demands from the CO2 legislation in the automotive industry will continue to require high development costs. We as a group have the expertise and financial strength to further expand our technology leadership and to achieve our goals in 2018. "

"Efficiency for us, not least means that we keep the capital investment in the Automotive Division over the entire period at the same level – despite the increasing demands and of the planned future growth," Winterkorn said. The capex will move from 2015 to 2019 at a competitive level between six and seven percent. 

About 56 percent, more than half of the capital investment, will be in Germany. "With this investment program, we reaffirm our commitment clear to our native plants and employees. Our 28 German sites are the backbone of the group: the highly trained team and highly efficient production here are a key competitive advantage we would like," Winterkorn said, adding: "At the same time strengthen and also expand our international presence to market opportunities to systematically use anywhere in the world." 

Bernd Osterloh, chairman of the Group Works Council of Volkswagen, said: "The level of planned investment shows: Volkswagen continues to invest in full force in its worldwide locations and thus also in the nearly 600,000 jobs worldwide.” Dr Winterkorn said: “Only investments in products and locations secure employment in the long term. To make this, we want to work together to ensure that we use the existing financial resources more efficiently in the future." 

Around 64 percent of the investment or euros 41.3 billion (Rs 330,361 crore) has been allocated to the Automotive Division for modernizing and extension to the product range of all brands, focussing on the expansion of the SUV range especially in the A / A0 area, as well as the partial modernization of the model range of light commercial vehicles parallel, vehicles and successor models in almost all vehicle classes based on modular technology and its components scheduled in the investment.

The Volkswagen Group says it is continuing its model initiative and the development of new markets and segments continued consistently. In powertrain, new engines with further improvements in performance, fuel consumption and emission levels will be introduced as also continue development of hybrid and electric drives. In addition the company over the next five years will invest euro 23 billion (Rs 176,295 crore) across all products. This includes approximately capacity expansion, a new Crafter plant in Poland and the new Audi plant in Mexico. 

Priorities are also – due to the high quality standards and continuous improvement of manufacturing processes – investments in press shops and paint shops. Investments in the areas of development, quality assurance, sales, genuine parts supply and information technology outside of manufacturing are scheduled. 

Volkswagen says the investment figures for the joint venture in China (euro 22 billion/Rs 168,630 crore) are not included in the consolidated amount will be financed from the funds of the joint venture companies themselves.

Photograph (L-R) Stephan Weil (SPD), Minister of Lower Saxony president and board member of Volkswagen Aktiengesellschaft, Prof. Dr. Martin Winterkorn, CEO of Volkswagen Aktiengesellschaft, and Bernd Osterloh, Chairman of the Group Works Council of Volkswagen.