Volkswagen Group Opens New Engine Plant In Mexico

Will Supply TSI Engines To Chattanooga Facility

Tuesday, January 15, 2013
The Volkswagen engine plant in Silao (Mexico).
The Volkswagen engine plant in Silao (Mexico).

The Volkswagen engine plant in Silao in the central Mexican state of Guanajuato was opened Tuesday. The new factory is the Volkswagen Group’s 100th plant worldwide.  

The inauguration ceremony was attended by the President of Mexico, Enrique Peña, the Governor of the state of Guanajuato, Miguel Marquez, and Prof. Dr. Martin Winterkorn, chairman of the Board of Management of Volkswagen Aktiengesellschaft.  

The factory will supply Volkswagen’s North American vehicle plants in Puebla/Mexico and Chattanooga with fuel-efficient TSI engines produced locally in Silao.

Dr. Winterkorn said, “The Silao factory is the Volkswagen Group’s 100th plant and therefore represents one of the largest and most international production networks in the automotive industry. With this new plant we are driving our ambitious major North American offensive forward. Over the next three years the Volkswagen Group will be investing more than $5 billion in North America alone. Silao is thus also a strong symbol of our uninterrupted growth trajectory and the Group’s continuing internationalization.”

Strengthening its market position in North America is a component of the Volkswagen Group’s global growth strategy. In this context, the company is planning annual sales of one million vehicles in the USA alone from 2018 based on models such as the Jetta, the Beetle and the new U.S. Passat tailored to the demands of U.S. customers which are produced at the North American plants with a high degree of localization.

With the start of engine production in Silao, Volkswagen is continuing its success story in Mexico that already spans almost 60 years. Along with the Volkswagen plant in Puebla, the MAN commercial vehicles plant in Querétaro and the planned Audi vehicle plant in San José Chiapa scheduled to begin production in 2016, the Group remains a key growth driver for Mexican industry, officials said.

Going forward, Silao will supply the North American vehicle plants in Puebla und Chattanooga with the latest generation of fuel-efficient TSI engines. The plant is designed for a medium-term annual capacity of 330,000 units. Investment runs at $550 million. Volkswagen will be creating over 700 new jobs at the 60 hectare plant in Silao in the medium term. Further jobs in the region will also be created at suppliers and in the service sector.

Engine production in Silao meets the high environmental standards of the Volkswagen brand’s “Think Blue. Factory” program. The aim of this program is to make more efficient use of resources and to achieve a sustained reduction in production-related emissions at all Volkswagen plants. As a result, all manufacturing equipment in Silao complies with the latest energy efficiency standards, thus achieving a significant reduction in the environmental impact of each produced engine. Special rooflights in the production halls, for example, combined with energy-efficient lighting throughout the facility ensure optimum natural light levels and simultaneously absorb the heat generated by the lighting system. The improved-performance TSI engines (EA 888) from Silao combine fuel economy and improved emissions with lower weight. 

The CEO of Volkswagen de México, Andreas Hinrichs, drew attention to the Mexican automotive industry’s growth path in 2012 and to Volkswagen’s contribution consisting of over 600,000 vehicles produced in the country. “For us, Silao is a big step towards the future. Volkswagen is once again generating strong momentum for growth and employment in the Mexican automotive industry.” 

Volkswagen de México currently builds four models for world markets at the Puebla plant. These are the Volkswagen Jetta, Golf Estate, Beetle and Beetle Cabrio. A total of 604,000 vehicles were manufactured in Puebla in 2012. Production of the U.S. Passat developed specifically for the American market began in Chattanooga in 2011. Over 150,000 vehicles already left the assembly line there in 2012.

The Volkswagen Group delivered 165,900 (2011: 153,300)* vehicles to customers in Mexico in 2012. The Volkswagen Passenger Cars, Audi, SEAT, Porsche, Bentley and Volkswagen Commercial Vehicles brands therefore recorded an 8.2 percent* year-on-year rise. 

*) including deliveries by the Porsche brand from August 1, 2012; excluding MAN and Scania.

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