Volkswagen to invest $577 million in Brazil auto plant

by   |  VIEW 379
Volkswagen to invest $577 million in Brazil auto plant

On Thursday, the 29th of August 2019, during a visit to German carmaker Volkswagen’s headquarter in Wolfsburg, State Governor of Brazilian state of Sau Paulo, Joao Doria said that the only carmaker across the globe to post a profit during second quarter amid tariff doldrums and declining auto sales, Volkswagen had agreed to invest as much as $577 million or 2.4 billion Reais in one of its factories in Brazil, the largest South American economy.

In point of fact, Volkswagen’s investment on one of its assembling plants in Sau Paulo came amid a terrible auto industry backdrop, when once “the heart of Brazil auto industry”, Sau Paulo had lost much of its traditional legacy, as other Brazilian states had been offering more generous tax incentive on foreign investment.

Nonetheless, Doria’s governorship had witnessed a steep turnaround on automotive industry investments in Sau Paulo, as Doria, widely contemplated as an aggressive policy maker among big-league automakers, had introduced a plan earlier this year to grant an incentive of as much as 25 per cent to the automakers in VAT (Value Added Tax), which would be investing at least 1 billion Brazilian Reais alongside creating 400 employments, a stringent move to retain and attract manufacturing hubs in Sau Paulo.

Meanwhile, followed by Doria’s speech in Wolfsburg headquarter, the State of Sau Paulo had been quoted saying in a separate statement on Thursday (August 29th) that the leading auto seller in 2019 excluding trucks, German carmaker Volkswagen, would be creating 1,000 jobs and investing roughly 2.4 billion Brazilian Reais in its Sao Bernardo do Campo plant, stationed at the historic centre of Brazil’s auto industry.