Volkswagen to Build New Engine Plant in Mexico
 Tomas Sarmiento & Alexandria Sage - Reuters
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September 23, 2010
Mexico City - Volkswagen AG will invest $550 million in developing a new engine facility in central Mexico to supply parts to two of its North American plants, the German automaker said on Wednesday.
The Silao, Guanajuato, plant in central Mexico is expected to build 330,000 engines annually from 2013 to meet demand from its Chattanooga, Tennessee, and Puebla, Mexico, plants.
"Currently, the Volkswagen Jetta, Golf Estate and the New Beetle are produced in Puebla," the company said at an event in the Mexican capital. "Production of the new mid-size sedan will begin in Chattanooga in 2011."
Volkswagen plans to sell 1 million vehicles in the U.S. annually by 2018, the company said.
Mexico is also home to other assembly plants run by foreign automakers, like Japan's Nissan Motor Co Ltd.
Auto manufacturing is at the heart of Mexico's export economy, which sends roughly 80 percent of finished goods to the United States, meaning that the fate of the Mexican economy is closely linked to that of its northern neighbor.
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