Volkswagen To Invest $550M In Mexico Plant

German automaker said it will invest $550 million to build a motor manufacturing plant, its second plant in Mexico.

MEXICO CITY (AP) -- Volkswagen will invest $550 million to build a motor manufacturing plant in Mexico.

It will be the German automaker's second plant in Mexico.

Volkswagen de Mexico head of operations Otto Lindner says construction will begin in October in Silao, a city in the central state of Guanajuato state that already hosts a major General Motors factory. It is expected to start producing 330,000 motors a year by 2012 and employ 700 workers.

The motors will supply Volkswagen's assembly plants in Puebla, Mexico, and Chattanooga, Tennessee. Lindner says the most of the parts to build the motors will be acquired from providers in the region.

Lindner made the announcement Wednesday, accompanied by President Felipe Calderon.

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