VW to invest over $60 billion in drive to be top automaker
By Maria Sheahan
FRANKFURT (Reuters) - Volkswagen AG (VOWG_p.DE: Quote) has earmarked 50.2 billion euros ($64.7 billion) of investments over the coming three years as it accelerates plans designed to help it become the world's largest car maker by the end of the decade.
As the company strives to replace Toyota Motor Corp (7203.T: Quote) as the No.1 auto maker globally, it is expanding its presence outside Europe, building or planning new factories in markets such as China, Mexico and Russia.
It is also stepping up investments in products and technology to consolidate its lead over stricken western European peers, which have slowed or shelved whole programs, engine technologies and platform revamps while grappling with high costs in a shrinking European market.
"Despite the challenging economic environment, we are investing more than ever before to reach our long-term goals," the German group's Chief Executive Martin Winterkorn said in a statement on Friday.
Volkswagen's total spending equals an average 16.7 billion euros for the three years from 2013 through 2015. Last year, it had said it would invest 62.4 billion euros in the five years from 2012 until 2016, or an average 12.5 billion per year.
The Wolfsburg, Germany-based company said its capital expenditure would total 39.2 billion euros, or 6 to 7 percent of sales for the period, broadly in line with analyst estimates.
That means Volkswagen will invest almost as much in property, plants and equipment over the next three years as analysts see Toyota and U.S. rival General Motors Co (GM.N: Quote) spending together, according to Thomson Reuters StarMine.
VW's strong sales outside Europe have allowed it to offer cut-price deals and swell its share of the battered European market to almost a quarter. Continued...