Volkswagen says it has new investment plan for Brazil

RIO DE JANEIRO, BRAZIL – Volkswagen has a new investment plan ready for a period of between 4 and 5 years in Brazil. But it intends to disclose it in the coming months, according to the automaker’s CEO in Latin America, the Argentinian Pablo Di Si.

With the launch of a new model, the Taos, a medium-sized SUV, the company will complete the last investment cycle in the next quarter, which totaled R$7 (US$1.2) billion in Brazil and US$850 million in Argentina.

This plan was started in 2017 – when Di Si was appointed – and mainly focused on a complete renewal of the product line. In Brazil alone, 20 models were launched during this period.

The Taos will be produced in Pacheco, in the metropolitan region of Buenos Aires, and there are good prospects for business abroad with the new car, according to Di Si. Volkswagen do Brasil has already started to export the Taos technology to Russia and India in the so-called “infotainment”, a media console that gets its name for combining information and entertainment. The system was developed by Volks engineering in São Bernardo do Campo (SP).

The ABC plant was chosen to house a kind of studio. The facility will be used for the pre-release of the new car to opinion-making groups, such as influencers on digital platforms.

Di Si was circling the Taos in this facility yesterday, dreaming of exporting the model to neighboring countries and the Caribbean. Sales abroad are the company’s only option to offset the rising dollar in Brazil and Argentina, says the executive.

The balance between imports and exports is currently uneven in Volkswagen and in most automakers, which complain about the pressure of costs in foreign currency. An even trade balance would help the Latin American operation reach financial stability in 2021, a demand made by the global management. “We almost got there in 2020,” Di Si points out.

With the emergence of new variants of the novel coronavirus, Volks decided to step up efforts to contain the spread in its four plants in Brazil and two in Argentina. According to Di Si, the company increased testing of employees. It also intensified the control of those who present symptoms of the disease and who were close to someone who eventually became infected.

Employees continue working two shifts, despite the shortage of components, particularly semiconductors – the small chips automakers dispute with the phone and electronics industry. Volks has not yet needed to schedule longer stoppages, as some companies have done. So far, stoppages have only occurred for a few hours, says Di Si. However, he says, there is a shortage of “all kinds of materials”. “There are days when I get to the plant and I don’t know if we are going to produce anything”, he stresses.

Volkswagen’s head office invited an employee to deal with the issue globally. He is a chip specialist, in charge of monitoring the needs of Volks group plants in each part of the world. This allows the company to draw up strategies and strengthen its power to negotiate with suppliers. The Taos model alone includes approximately 300 chips.

Although he refrains from talking about politics, Di Si, an Argentine executive who before joining Volks worked for Fiat Chrysler, says he is concerned with the country’s need to simplify its tax system. The economic scenario, of continuous instability, concerns him less. He says that at Volks they are “used to and prepared for it.”

“Brazil is not for amateurs. If I assume that the market will not oscillate more than 1% I’m in the wrong place,” says the executive.

Source: Valor