German carmaker Volkswagen Group plans to invest EUR84.2bn in its Automotive Division over the coming five years, for new models, environmentally friendly technologies and production facilities.
This investment is part of the group's investment planning for 2014 to 2018.
Of the total investment, more than two-thirds of the total amount will be used for efficient vehicles, drives and technologies, as well as environmentally friendly production.
Investments in property, plant and equipment in the Automotive Division will amount to EUR63.4 billion. Almost 60% of the investments in property, plant and equipment will be made in Germany.
From this roughly 65%, a EUR41.2bn, will be used in modernizing and extending the product range for all its brands, with main focus on new vehicles and successor models in almost all vehicle classes.
This will enable the group to continue its model rollout with a view to tapping new markets and segments.
Besides these investments, the plans also include capitalized development costs of EUR19.5bn and other investments including for financial assets in the amount of EUR1.3bn.
The luxury carmaker will launch new generations of engines offering additional enhancements to performance, fuel consumption and emission levels. In particular, the Group will continue its focus on the development of hybrid and electric motors.
In addition, the company will make cross-product investments of EUR22.2bn over the next five years, which includes capacity expansion.
Other investment focuses including press shops and paintshops will reflect the company's targets and the continuous improvement of its production processes.
Investments outside production are mainly planned for the areas of development, quality assurance, sales, genuine parts supply and information technology.
The group noted that it has not included its joint ventures in China in the above figure. However, it will invest EUR18.2bn in new production facilities and products in the period from 2014 to 2018. These investments will be financed from the joint ventures' own funds.
Image: Volkswagen Group will invest EUR84.2bn over the next five years. Photo: courtesy of Volkswagen AG.
