With local car sales and exports to Brazil soaring, Volkswagen Argentina has decided to invest $155 million to build a new plant in Cordoba province to boost its production of transmissions, the governor's office said.
The investment will be made over two years and will raise production capacity to 4,740 gear boxes per day from the current level of 3,500, Cordoba Governor Juan Schiaretti said in a press release. A representative from parent company Volkswagen AG (VLKAY, VOW.XE) couldn't be reached for comment.
The expansion will boost Volkswagen's exports from Argentina by about $130 million a year, according to the release.
After slumping early last year as demand dropped off due to the international financial crisis, automobile sales and production have soared this year. During the first five months of the year, car makers cranked out 241,220 vehicles, up almost 60% on the year, according to the manufacturer association Adefa. Exports during the same period totaled 146,731 vehicles, up almost 70% on the year.
If current trends hold, automobile production will set a new record this year, according to Adefa.
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