Its spiritual home may be in Germany, but after enjoying significant growth in South America, Volkswagen will invest €2.3billion in new products and manufacturing capacity expansion in Brazil between 2009 and 2014.

Having set a target to sell one million vehicles a year in the country within five years, Volkswagen will spend big to support the development of new products and the expansion capacity of Anchieta Taubate and its engine plant in San Carlos.

Currently, Volkswagen do Brazil has a daily production capacity of 3,000 vehicles and is already the country’s largest car manufacturer. Indeed Volkswagen also has the largest dealer network in the Brazilian automotive industry with 600 dealers located across the country. Deliveries to customers have risen by 70 per cent since 2005 to 585,000 units in 2008 with local production expected to exceed 800,000 vehicles this year.

During this year and next year, Volkswagen will launch 26 product innovations in the country having already rejuvenated its product range over the last two years with the introduction of the new Gol, Saveiro, Voyage and Fox. The new Cross Fox will debut at the end of November, with the Passat CC, Tiguan and Eos available as imports.

Brazil is widely viewed as a market with huge growth potential – statistics indicate that there is currently only one vehicle per seven inhabitants of the country, compared to Germany where there is one vehicle for every two inhabitants. Vehicle density is expected to grow rapidly in Brazil to one vehicle per four inhabitants over the next five years.