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VW shifts into investment overdrive

Friday, November 21, 2014 - 01:42

Volkswagen is on a quest for global leadership - and is willing to pay to get it. As Ciara Lee reports, it's announced an 85 billion euro ($106 billion) investment programme over the next five years to push foreign expansion, new models and technology.

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Global leadership - the mission of German car firm Volkswagen. It's to invest over eighty-five billion euros in its operations over the next five years to push foreign expansion, new models and technology. It says the bulk of the cash will flow into developing more efficient vehicles and production methods. Sports utility vehicles, and developing hybrid and electric drives are on the agenda. Around 23 billion euros will be spent on expanding capacity at its plant in Poland, and the new Audi plant in Mexico. But Volkswagen Group Chief Executive Martin Winterkorn says the programme is also a vote of confidence closer to home. SOUNDBITE (German) VOLKSWAGEN GROUP CHIEF EXECUTIVE, MARTIN WINTERKORN, SAYING: ''What's really noteworthy here is that more than half of the capital expenditure is flowing towards Germany. An impressive 36 billion euros. And I believe that one could say that that's a clear statement for our 28 factories here in Germany, and for our 270,000 workers who work in Germany.'' Europe's largest carmaker is also embarking on an efficiency drive to save five billion euros across its multi-brand group including luxury divisions Audi and Skoda. But squeezing budgets appears to be tough as VW faces costly commitments to meet carbon emission targets. The company also needs to beef up its troubled operations in the US while expanding in China, its biggest market. European car sales have been motoring on for the 14th straight month of growth as the market continues to gather speed. New car sales rose over six percent in October. But the industry remains well short of its pre-crisis peak and is only recently recovering from a six-year slump.

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VW shifts into investment overdrive

Friday, November 21, 2014 - 01:42