Germany’s Volkswagen AG will invest 560 million euros ($650 million) in Argentina to help manufacture a new sport-utility vehicle at its automotive terminal in Pacheco, the company said in a statement on Friday.
Argentina’s business-friendly president, Mauricio Macri, has been seeking investments since his coalition won the country’s five largest population centers in last month’s midterm elections.
Herbert Diess, chief executive of the Volkswagen brand, and Pablo Di Si, the company’s regional leader, negotiated the investment with Macri at a meeting in Pacheco.
The move is part of the world’s largest automaker’s strategy to cede more responsibility from its headquarters in Wolfsburg, Germany, to regional operations. Volkswagen said the investment would create about 2,500 jobs.
Based on modular production architecture called MQB, the automaker plans to roll out 20 new models in South America by 2020, including the first SUV for Argentina and a completely redesigned line of pickup trucks.
“Volkswagen believes in the great potential of the South American continent,” Di Si said in the statement. “The investment announced today creates perfect conditions for efficient manufacturing of our new sport-utility vehicle.”
Argentina’s car output climbed 15.9 percent in October to 43,854 units from a year earlier in its sixth consecutive month of growth, according to the Association of Automotive Factories.
“We are breaking records, more than 780,000 cars sold (year to date) and, more importantly, a record for trucks, which means production is moving, construction is moving,” Macri said at a televised event to announce the investment.