While the ongoing chip shortage has forced Volkswagen to cut back on offering infotainment screens in Brazil, the automaker has big plans for the country and the region. Volkswagen announced today that it will not only invest €1 billion ($1.16 billion at current exchange rates) in South America but that it will also launch a new family of compact cars, which it teased as well.
It’s called the VW Polo Track, and it will be the first model in the brand’s new compact car family for the market. It will ride on the company’s MQB platform that underpins several other VW and VW Group models. Specifics are scarce at the moment, but the new entry-level segment will arrive in Latin America starting in 2023. VW will build the new Polo Track at its plant in Taubaté, Brazil.
VW’s big investment comes when the company is expecting a “positive result” in the region for the first time since 2013. The investment will come over the next five years, which will bring local vehicle projects to South America. In 2017, the company made a concerted effort to update its lineup, bringing 20 new models to the South American market in just four years.
The investment is part of the company’s effort to digitize its products and decarbonize its operations, which include a new biofuel research center in the region. VW is betting big on a green future with highly connected cars and next-gen features.
VW has been pushing hard to reinvent itself for an all-electric future, making bold promises to dozens of new EVs and hybrids by the end of the decade as its combustion engine business slowly fades away. EVs still make up an infinitesimal slice of the overall car market. Still, they are gaining new buyers each year as the technology matures and shows its benefits to consumers who can recharge at home and avoid the hassle of regular oil changes.