Volkswagen to set up new motor production line at central Mexico plant

Workers walk outside the Volkswagen (VW) plant as the company will temporarily close its factories in Mexico amid growing worries over the spread of the coronavirus disease (COVID-19), in Puebla
FILE PHOTO: Workers walk outside the Volkswagen (VW) plant as the company will temporarily close its factories in Mexico amid growing worries over the spread of the coronavirus disease (COVID-19), in Puebla, Mexico, March 29, 2020. REUTERS/Imelda Medina

November 12, 2020

MEXICO CITY (Reuters) – German carmaker Volkswagen AG <VOWG_p.DE> said on Thursday it will invest $233.5 million in a new production line for motors at a existing plant in central Mexico.

“Volkswagen has found in Guanajuato fertile ground for a new generation of economic development,” Steffen Reiche, president of the executive council of Volkswagen’s Mexico unit, said in a presentation at the plant in the central state of Guanajuato.

Christopher Glover, executive vice president of production and logistics, said the investment would increase the plant’s production capacity by 75%. The company said it would begin manufacturing the new line of motors, called EA211, in 2021.

The announcement follows the election defeat of U.S. President Donald Trump. Trump took office in 2017 threatening to punish car makers who built up capacity in lower-cost Mexico, leading to a marked chill in investment in the United States’ southern neighbor.

(Reporting by Sharay Angulo; writing by Laura Gottesdiener; Editing by Dave Graham and Chris Reese)