Volkswagen Group aspires to speed up its growth and pull alongside its key competitors by investing $7 billion in North America.
According to the Wall Street Journal, the Germany-based automaker will invest a whopping $7 billion to put up a new plant in an undecided part of North America to hasten its growth and catch up with its major rivals including Toyota Motors, Ford Motors, and General Motors.
“The U.S. is a cornerstone of our 2018 strategy,” said Volkswagen CEO Martin Winterkorn to WSJ.
However, he added during the auto show news conference in Detroit that the plans are not yet final, “We have not made that decision in the supervisory board.”
A fraction of its budget for expansion will be allotted for the production of a mid-size sport-utility vehicle, a model that is missing from the company’s lineup.
“We really need that vehicle,” said Jeff Williams, owner of Williams auto world, a Volkswagen—Audi—Subaru dealership in East Lansing, Mich. to the WSJ. “That is a big, big segment, and we have to be competitive there.”
In the past years, Volkswagen’s growth in the United States had been rapid, but in 2013, even as the overall U.S. market increased, it tripped up. Still, the company was able to sell over 400,000 vehicles that year. Its Audi unit was also able to sell over 150,000 units in the U.S.
Through its expansion in the U.S., the automaker aims to market 1 million units by 2018.
To date, Volkswagen already has a couple of plants in Mexico. The first one will start producing the 2015 Golf compact this week, while the second one is still in the works.
It also opened a plant in Chattanooga, Tenn. In 2011, however, due to the company’s slump in 2013, the plant wasn’t able to function completely.
If the plan succeeds, Volkswagen will have a total of four plants n North America.
