German legacy automaker Volkswagen takes its expansion plans to a whole new level through a substantial investment of €1B in South America by 2026.
VW disclosed its 2027 growth target of 40% in South America, focusing on the region’s largest market Brazil.
“As a fast-growing car market, South America is of strategic importance to Volkswagen. In recent years, the local team has achieved the turnaround and sustainably improved profitability and competitiveness. The task now is to continue working on the cost position and, at the same time, implementing the product offensive. To this end, we are investing one billion euros in South America by 2026.”
VW CEO Thomas Schäfer
VW’s move to expand in South America comes after its research discovered that the region’s market will progress by 11% in 2030.
VW to launch multiple net-zero emission vehicles in Brazil as subscriptions
To achieve its ambitious growth target, VW announced plans to launch the famous Volkswagen ID.4 and ID.Buzz in Brazil.
Even more, the German brand aims to launch 15 new electric and flex-fuel vehicle models by 2025 alone.
VW believes that offering car subscriptions is vital to aid its expansion target. True enough, more than 3,000 customers enrolled in the company’s car subscription program in 2022.
That considered, VW expects to see its car subscriptions grow by a whopping 150% this year.
“With the product offensive, we are bringing extremely attractive vehicles to customers in Brazil and South America. It helps us accelerate the transformation to zero-carbon and fully networked mobility. And we are making good progress. The new Polo is already the best-selling car in Brazil. The launch of the best-selling ID.4 and the iconic ID. Buzz in the Brazilian market will bring us further momentum.”
Alexander Seitz, the Executive Chair of Volkswagen Group South America
Interestingly, VW estimates Brazil’s EV adoption to only account for approximately 4% of the market in 2033. However, it targets to surpass the market’s growth in the BEV segment.
See Also:
- Electric vehicles are anticipated to match gasoline car prices in 2023
- Volkswagen BEV sales hit 70,000 globally in Q1 2023
- Volkswagen plans to produce EV batteries in Indonesia, forms partnerships with major companies
- Volkswagen to build 44,000 ID. Buzz in 2023
- Volkswagen to construct a new battery production plant in Canada
In contrast, VW is currently facing challenges in the EV market, citing a “strong customer reluctance” towards the shift to BEV. Consequently, it has reportedly been downsizing EV production in Emden Plant.
Hopefully, this new market will effectively support the iconic German automaker’s electrification efforts.
