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 Volkswagen said the bulk of the cash will flow into developing more
efficient vehicles and production methods, taking its capital
expenditure to between 6 and 7 percent of revenue in the period from
2015 to 2019, which analysts said amounts to a slight hike in
investment spending.
Analysts at investment banking advisory firm Evercore ISI said, "As
expected, VW's five-year capex planning has not become a victim of
the company's efficiency program which is, among other things,
aiming at 5 billion euros of efficiency gains at the VW brand by
2018."
Volkswagen shares rose 1 percent, to 176.10 euros at 1140 GMT, while
the DAX blue chip index was trading up 2 percent.
Around 41.3 billion euros of the investment plan will go toward
developing a range of sports utility vehicles, modernizing part of
the light commercial vehicle portfolio and toward developing hybrid
and electric drives.
At the same time, investments are also planned in new vehicles and
successor models in almost all vehicle classes, which will be based
on modular toolkit technology and related components, the company
said in a statement.
Volkswagen Group Chief Executive Martin Winterkorn said the
investment plan will help it become "the leading automotive group in
both ecological and economic terms with the best and most
sustainable products."
Around 23 billion euros will be spent on expanding capacity at its
plant in Poland where it builds Crafter vans, and the new Audi plant
in Mexico, as well as on paint shops and a production facility to
make vehicle parts.
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Poised to meet its annual sales target of 10 million vehicles four
years early in 2014, Europe's largest carmaker has also sought to
embark on an efficiency drive to save 5 billion euros across its
multi-brand group which includes luxury division Audi and Czech
carmaker Skoda.
But squeezing budgets appears to be tough as VW faces costly
commitments to develop fuel-efficient powertrains to meet carbon
dioxide emission targets, and to beef up its troubled operations in
the United States while expanding in China, its biggest market.
Volkswagen's Chinese joint ventures will invest 22 billion euros in
new production facilities and products by 2019, the company said.
(1 US dollar = 0.8049 euro)
(Reporting by Andreas Cremer, Jan Schwartz and Edward Taylor;
Editing by Kirsti Knolle and Vincent Baby)
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