Located in the state of Guanajuato, the new facility will be used to manufacture latest-generation engines and ship them to Volkswagen's car assembly plants in Puebla, Mexico, and Chattanooga, US.
The production target was set at 300,000 units each year, starting 2013, with the engines to power the VW offensive in the US: the car maker stated its goal of selling one million cars in the US starting 2018.
"This engine plants writes a new chapter in Volkswagen’s success story in Mexico spanning more than fifty years," said Hubert Waltl, member of the Volkswagen brand board of management for production.
"Innovative products, skilled and motivated employees and efficient, environmentally-friendly production processes are the basis for our global growth. The Volkswagen de México team and the new Silao plant embody all of this."
The new facility in Mexico will cost Volkswagen $550 million, with the resulting plant to hire some 700 local workers in the short term, and even more coming from suppliers and logistics companies.
"Silao is a big step towards the future for us. We are triggering new momentum for growth and employment in the Mexican automotive industry," added Otto Lindner, chairman of Volkswagen de Mexico, who produced 435,000 vehicles last year.
Mexico is an important production hub for Volkswagen, that builds here the Jetta, Golf Estate and New Beetle.
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