Volkswagen Invests Big Time in its Mexico Facilities

Volkswagen has recently announced it is investing $1 billion in its sprawling manufacturing complex in Puebla, Mexico. The company has long had many facilities there and is planning a major expansion of the existing complex. The investment should see a boost of production capacity at Puebla by 25 percent over the next two years, from 450,000 units to more than 550,000.

VW also plans to begin building a new small car at Puebla in 2010. Internally known as the NCS for "new compact sedan", this platform will eventually spawn the current Jetta’s replacement.

This is all part of an ever-growing expansion plan. Volkswagen’s high-profile Strategy 2018 expansion plan is aimed at turning VW into the world’s largest manufacturer. To beat Toyota and GM though, Volkswagen is going to need to produce at a lower cost than them, which means expanding production to other parts of the world. Investing so heavily in Puebla is doing just that.