Volkswagen to open $2 bn factory in Brazil - report

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German automaker Volkswagen is set to invest $2 billion in a new factory in far northeastern Brazil, a specialty publication said Wednesday.

The German firm and officials in Pernambuco state are finalizing the details of the deal, the Valor Economico daily reported, without citing sources.

Plans are for the factory to be built in Cabo de Santo Agostinho (Cape of Saint Augustin), a town some 50 kilometers (31 miles) south of the regional capital Recife, in the Suape industrial port area.

The factory is being built to produce 200,000 popular brand vehicles a year.

There are some 30 million vehicles in Brazil, a country with a population of 191.5 million residents.

Fiat has the largest market share, with nearly 23 percent, followed by Volkswagen with 22 and General Motors with nearly 20 percent, according to figures from the ANFAVEA association of vehicle manufacturers.

Factory models will probably include the fuel-efficient, three-cylinder Up!, presented at the Frankfurt Motor Show in September, Valor Economico said.

© 2011 AFP

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