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Volkswagen to set up new motor production line at central Mexico plant

FILE PHOTO: A car stands at the production line for the electric Volkswagen cars, model ID.3 and model ID. 4, in Zwickau, Germany, September 18, 2020. REUTERS/Matthias Rietschel

MEXICO CITY (Reuters) - German carmaker Volkswagen AG VOWG_p.DE said on Thursday it will invest $233.5 million in a new production line for motors at a existing plant in central Mexico.

“Volkswagen has found in Guanajuato fertile ground for a new generation of economic development,” Steffen Reiche, president of the executive council of Volkswagen’s Mexico unit, said in a presentation at the plant in the central state of Guanajuato.

Christopher Glover, executive vice president of production and logistics, said the investment would increase the plant’s production capacity by 75%. The company said it would begin manufacturing the new line of motors, called EA211, in 2021.

The announcement follows the election defeat of U.S. President Donald Trump. Trump took office in 2017 threatening to punish car makers who built up capacity in lower-cost Mexico, leading to a marked chill in investment in the United States’ southern neighbor.

Reporting by Sharay Angulo; writing by Laura Gottesdiener; Editing by Dave Graham and Chris Reese

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