MADRID -- Volkswagen Group will invest 4.2 billion euros ($4.8 billion) in its two factories in Spain including in Seat’s plant near Barcelona, which reports say will build the next Audi A1.
VW did not give details of how the investment for the Seat factory in Martorell and the VW plant in Pamplona in northwest Spain will be spent.
VW Group purchasing chief Francisco Javier Garcia Sanz said the investment “is a guarantee for the future of VW Group facilities in Spain, which are preparing themselves for the assignment of new models.” The models are currently under development and will be the subject of future announcements, he said in a statement.
VW said the investment guarantees the future of its factories in Spain and will also have a positive impact on the Spanish automotive supply industry. “Through this investment, the Group will substantially increase the supply of parts and components manufactured in Spain,” VW said in the statement.
Media reports in Belgium last week said VW plans to move production of the Audi A1 entry premium car to Seat’s Martorell factory from VW’s factory in Brussels. The reports cited Belgian unions.
The Seat factory needs new models to operate at full capacity and help the brand to achieve sustainable profitability. Seat swung to a 33 million euro operating profit in the first quarter from a 36 million loss in the same quarter last year, its first quarterly profit in seven years.
Seat increased production at Martorell by 13.5 percent to 443,000 cars last year, according to its annual report, but output was still below the plant’s 500,000 capacity.
Industry association ANFAC welcome the VW investment, calling it a vote of confidence in the Spanish economy.
The Seat Leon, Ibiza and Altea and Audi Q3 models are produced in Martorell, VW builds the Polo subcompact in Pamplona, according to Automotive News Europe’s Guide to Assembly Plants.