When a toyota automaker turns to Europe, a German automotive giant looks to take a gamble
By Matt Borsig,Bloomberg NewsThe German automaker Volkswagen Group, which made its biggest U.S. acquisition to date in January, is turning its attention to Europe as it seeks to expand into the automotive market.
A spokeswoman for Volkswagen said the company plans to invest $1 billion in two projects in the region over the next five years.
The companies are considering a joint venture, she said, but no formal talks are underway.
Volkswagen shares have gained more than 12% this year, the largest gain in more than five years, amid Volkswagen’s growing market dominance in Europe.
Volkswagen’s U.K. business has suffered from the company’s heavy use of diesel cars, which are less fuel-efficient than gasoline-powered cars and are the subject of widespread government and public health and safety concerns.
The company has been working to develop a new fuel-saving technology for its diesel vehicles.
It recently announced a partnership with the American Fuel Cell Association, a trade group.
Volvo also said it plans to buy up to 5 million acres of land in Europe over the course of the next three years, adding to plans for more than $4 billion in investments across Europe.
Volkswagen has about 2,000 U.N. employees, and its plant in Brünn, Germany, employs some 2,500 people.
Volkswagen also has its plant at the Volkswagen plant in Chattanooga, Tennessee.