FRANKFURT (AP) -- German carmaker Volkswagen AG said Friday it will buy some assets of German contract carbuilder Wilhelm Karmann GmbH to create a new manufacturing subsidiary that will eventually build a new car model.

Volkswagen said it will begin vehicle production at Karmann's main Osnabrueck, Germany site and headquarters in 2011, but did not specify what new car it would produce there. It didn't release any financial details.

In a short statement, VW, based in Wolfsburg, said its supervisory board approved the acquisition of land, machinery and equipment formerly belonging to the Karmann holding company at the Osnabrueck site.

VW said that according to its current plans, it could create 1,000 jobs at the site by 2014. It said it will require 200 people starting in 2010 to begin production and set up the vehicle project.

VW said Karmann has extensive experience in the production of small cars, which it could access as needed, but that it first has to hold final negotiations with Karmann shareholders on the deal.

Tracing roots back to 1874, Karmann long specialized in building bodies and components for cars and assembling them for other manufacturers. It's most famous car model was the Karmann Ghia, built for VW from 1955 to 1974.

In addition, it built models including Beetles and Golfs for VW, and has also worked with other manufacturers including Porsche, BMW, Renault, Chrysler and Ford.

In a separate report, VW said its automotive division will invest around euro26 billion ($39 billion) in the coming three years to upgrade its operations and and to modernize and expand its product range.

The company said the figure includes nearly euro20 billion on property, plant and equipment investments, half of which would be spent within Germany.

"The automotive industry is facing significant economic and technical challenges," Martin Winterkorn, the company's chief executive said in the report.

"The Volkswagen Group is vigorously driving forward its longterm growth strategy by investing in environmentally friendly models, innovative technologies and new plants. We are continuing to make focused investments in our future," Winterkorn said.

The company's main workers' representative, Bernd Osterloh said the investments are the basis for secure jobs and the further development of the company's global facilities.

"We can only offer the best products tomorrow if we invest today. And that is what the board of management and the work force throughout the Volkswagen group are focusing on," Osterloh said.

The company said that besides manufacturing it planned to invest about euro7 billion in areas including quality assurance, parts supply and information technology.

In the report, VW said its U.S. plant near Chattanooga, Tennessee -- currently in construction -- will start operations in 2011. It also said production at its sites in Russia and India are being ramped up, "allowing these growth markets to be supplied with locally manufactured vehicles."

VW said its joint venture projects in China, which are not consolidated in the group, will invest euro4.4 billion between 2010 and 2012.

Shares of VW were slightly higher at euro95.84 in Frankfurt afternoon trading.