Volkswagen plots MQB-based SUV for South American market

Volkswagen is to invest around 560 million euros (Rs 4,280 crore) over the next five years in the production of a new SUV in Pacheco, Argentina. From 2020 onwards, the plant will supply the new model built in Argentina to the entire South American continent. The new vehicle project will create around 2,500 jobs. 

"We are laying the foundations for the brand's growth on international markets with Volkswagen's Transform 2025+ strategy. South America and Argentina play an important role in this regard. Key elements of the growth strategy are the biggest model offensive in the history of the brand and the systematic regionalisation of our business. We will be underpinning our positioning at the top of the volume segments and winning further market share with new models from Volkswagen tailored to the wishes of customers in the markets," Dr Herbert Diess, CEO of the Volkswagen brand, said during a meeting with the president of Argentina, Mauricio Macri, and the CEO of the Volkswagen South America Region, Pablo Di Si, in Pacheco, on November 11.

Under its Transform 2025+ future strategy, Volkswagen is taking measures to realign business on world markets and delegating responsibilities previously controlled centrally from Wolfsburg to the regions. Going forward, the regions will hold full responsibility for the entire scope of business activities – right through to decisions relating to the model range. In addition to South America, responsibilities have also been delegated to the regions of North America, China and the Sub-Saharan area of Africa.

New MQB-based SUV
The new vehicle project in Argentina is a further milestone in what is to date the Volkswagen brand's largest product offensive in the South America region. The design, size and equipment of the SUV planned for 2020 and based on MQB technology are targeted to appeal to a broad customer base on the South American continent – and thus bring further momentum to the brand's South America strategy.

"Volkswagen believes in the great potential of the South American continent. The investments create the optimal conditions for the efficient production of our new SUV – built in Argentina for the markets in South America," said Volkswagen South America's CEO Di Si said.

The modernisation measures under the investment plans will optimise the manufacturing process and thus enhance both quality and sustainability in production. This is the ideal preparation for start of production at the Pacheco plant in 2020.

Volkswagen has launched the largest product offensive in its history in South America: 20 new models based on the Modular Transverse Toolkit (MQB), including a totally revamped pickup range and further locally-built SUVs, will be launched in the region by 2020.

According to Volkswagen, the localised variant of the MQB will play a decisive role in enhancing the Volkswagen brand in South America with new, attractive vehicles for the region. Assuming a positive overall market trend, the company expects to move back into the black in South America by 2020.

Currently, there is a significant increase in sales in the region. The January to October 2017 period saw sales of around 36,000 vehicles, a year-on-year growth of more than 60 percent. Key drivers behind this positive development are Brazil and Argentina. Growth in the small car segment, which includes the Gol and Voyage, in these markets is particularly strong, says the company.