SAO PAULO Oct 3 German automaker Volkswagen AG plans to invest 520 million reais ($235.9 million) to begin assembly of its newest Golf model in Brazil, CEO Thomas Schmall said on Thursday.
The new Golf factory in the southern state of Parana will raise Volkswagen's auto production capacity in Brazil by 20 percent to 1,000 vehicles per day, Schmall said after meeting Brazil's President Dilma Rousseff in Brasilia.
He said construction had already started and production should begin in two years.
Volkswagen's announcement comes two days after fellow German carmaker Daimler said it would invest $230 million to build a factory to manufacture Mercedes-Benz C-Class and GLA cars.
With 3.8 million vehicles sold last year, Brazil is the world's fourth-largest car market after China, the United States and Japan. Its premium segment is fledgling in size, however, and represents only around 1 percent of sales, in part due to heavy tariffs levied on imports.