In separate but related developments, Volkswagen (VW) and Daimler have confirmed their plans to invest in Argentina in coming years. According to a report by Esmerk news service, VW will invest USD100 million in its transmission plant in Cordoba and vehicle production facility in General Pacheco. The investment will facilitate the production new models such as Suran and redesigned Amarok pick-up, which is expected to roll out in September and will be released to the local market in October 2016. The investment is aimed at "renewing global platforms manufactured in the country and the modernization of its production plants", said Herbert Diess, member of the Board of VW and director of passenger vehicle division in a statement. Separately, Daimler's Mercedes-Benz said it will centralise its Latin American offices for van sales in Argentina, although the automaker did not disclose how much investment the move will entail. The announcements were made during Argentine president Mauricio Macri's visit to Germany.
Significance: VW has been present in Argentina for 35 years and employs more than 6,000 workers at its two plants. Although Argentina is an important production base for VW in South America, its output has fluctuated due to the volatile economic conditions. VW's vehicle production at the General Pacheco plant peaked at 125,400 units in 2011 and declined for the next three years before registering a jump in 2015. Nevertheless, output – comprising the current-generation Amarok and Spacefox – stood at just 80,400 units in the year. Meanwhile, Mercedes-Benz has been understandably guarded about its move as it is yet to decide who will lead the van sales unit. Media reports have indicated it may require a USD150-million investment to relocate the unit that currently operates out of Brazil. The automaker's manufacturing presence in Argentina includes a plant in Gonzales Catan that produces Sprinter and Vito vans. According to IHS Automotive estimates, a new plant in Cordoba is scheduled to produce a one-tonne pick-up in 2018.
