November 20, 2009 / 1:09 PM / 10 years ago

Volkswagen to invest 19.9 bln eur in 2010 to 2012

FRANKFURT, Nov 20 (Reuters) - Volkswagen (VOWG.DE) plans automotive capital expenditure of around 19.9 billion euros ($29.55 billion) in the coming three years, half of it in Germany alone, Europe’s largest carmaker said on Friday.

For the period of 2010 to 2012, it expects a capex-to-sales ratio of around 6 percent on average as a result, VW said in a statement.

Roughly 13.3 billion euros of the total investment in property, plant and equipment will be earmarked for modernising and expanding its product range.

“In the area of powertrains, new engine generations will be introduced that offer additional improvements in performance, consumption and emissions. Automatic gearbox capacity will be aligned with growing demand,” it said.

The remaining 6.6 billion euros will be invested in “cross-product technologies” in the coming three years.

“Because of the high quality and cost targets, the new products require modifications to press and paint shops as well as assembly facilities. Outside manufacturing, investments are planned mainly in the areas of development, quality assurance, genuine parts supply and IT,” VW explained.

Including another 5.9 billion euros in capitalised development costs — research and development expenditure that must be accounted for as an asset and depreciated over time — overall investment will amount to 25.8 billion euros.

This sum does not include a further 4.4 billion euros in investments over the same period at its two Chinese joint ventures, which are not fully consolidated. [ID:nLB704931]

Reporting by Christiaan Hetzner

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