November 10, 2017 / 3:02 PM / 9 days ago

Volkswagen AG to invest $650 million in Argentina - governor

BUENOS AIRES (Reuters) - Germany’s Volkswagen AG (VOWG_p.DE) will invest $650 million (491.70 million pounds) in Argentina to modernize its operations, the governor of Buenos Aires province, where the carmaker has a factory, said on Friday.

Argentina's President Mauricio Macri and Herbert Diess, chairman of the board of German carmaker Volkswagen, shake hands during a ceremony at Volkswagen's automotive terminal in General Pacheco, Argentina November 10, 2017. Argentine Presidency/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.

The investment will go into Volkswagen’s automotive terminal in Pacheco, a town in the province, Argentina’s largest, that is governed by Maria Eugenia Vidal.

Vidal is part of business-friendly President Mauricio Macri’s coalition. Macri has been seeking investments since his allies won the five largest population centres in Argentina in last month’s midterm elections.

“We are breaking records, more than 780,000 cars sold today and, more importantly, a record for trucks, which means production is moving, construction is moving,” Macri said at the announcement after Vidal spoke.

The automaker, which plans to manufacture the first SUV in Argentina for the entire region, presented the global MQB A platform that will allow the production of new models.

Argentina’s car output climbed 15.9 percent year-on-year in October, to 43,854 units. It accumulated six consecutive months of growth compared to 2016, according to the Association of Automotive Factories.

Reporting by Walter Bianchi; Writing by Cassandra Garrison; Editing by Chizu Nomiyama and Bernadette Baum

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