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Volkswagen, Volvo Investing Heavily In Future Products Photo:
Trevor Collett | Nov, 28 2013 | 1 Comment

Volkswagen and Volvo have both got the bank books open, with the carmakers announcing sizeable investments in future development and production.

The Volkswagen Group has announced a total investment of €84.2 billion (AU$125.9 billion) in its Automotive Division between 2014 and 2018.

Over two thirds of that amount is dedicated to ‘green’ development, including fuel-efficient vehicles and environmentally-friendly production.

Closer examination reveals Volkswagen plans to invest AU$94.8 billion in property, plant and equipment; around AU$750m per year less than in previous planning.

The German carmaker plans to spend AU$61.3 billion of the total amount on new and updated models, while AU$33.2 billion will go towards press and paint shops, genuine parts supply, information technology, quality assurance and sales.

Volkswagen is also ‘keeping it local’, with more than half of the investments in property, plant and equipment (around 60 percent) to be made in Germany.

Meanwhile Volvo has secured an AU$882 million loan from the China Development Bank, according to a report from Reuters.

The Swedish carmaker plans to repay the loan before 2021, by which time it hopes to double its current annual sales in China to 800,000 units.

New and updated models are again believed to be a focus for the investment, with expansion in the Chinese market firmly fixed on Volvo’s sales radar despite China already being its top market.

Volvo is remaining tight-lipped for now as to which models will receive the financial boost and exactly where and how it plans to spend the money.

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