German carmaker Volkswagen Group is planning to invest BRL520m ($235.5m) to set up a a new production plant in Parana, Brazil, to initiate the assembly of its newest Golf model.
The company has commenced the construction and the plant is expected to begin production in two years.
The plant will raise the company's auto production capacity to 1,000 vehicles per day in Brazil, an increase of 20%.
Volkswagen Brazilian unit Thomas Schmall head said: "With this new investment, Volkswagen will invest a total of $4.1 billion between 2012 and 2016."
Volkswagen Latin America production in charge Michael Macht said: "This decision illustrates Volkswagen's confidence in Brazil, which is increasingly asserting itself as one of the world's major vehicle producers and consumers."
Recently, the automotive giant announced its plans to invest $529m to commence the local assembly of new Golf model as well as restart production by its Audi division in Brazil.
The automaker's subsidiary Audi will also invest about $200m to expand facilities at its factory in Sao Jose dos Pinhais located outside the capital of Parana.
