OTTAWA (Reuters) - German car maker Volkswagen AG VOWG_p.DE will get 400 million Euros ($407 million) in trade financing from Canada to help expand its southern U.S. and Mexican operations and thereby generate business for Canadian firms, Ottawa said on Thursday.
The trade-financing agency Export Development Canada (EDC) said it would match Volkswagen with qualified small and medium-size Canadian companies.
“With the southern U.S. and Mexico increasingly becoming prime production locations for global automakers, EDC has a role to play in making sure Canadian companies have the opportunity and financial wherewithal to compete for that business,” Carl Burlock, EDC senior vice president, said in a statement.
Volkswagen said in March it would invest about $1 billion to expand its vehicle assembly plant in Mexico’s Puebla state.
An EDC spokesman said that since 2003, the agency had provided a total of C$33 billion ($27 billion) in financing for foreign companies, resulting in C$48.7 billion worth of contracts for Canadian firms.
Reporting by David Ljunggren; Editing by Ted Botha