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Volkswagen plans big growth in 2000

Volkswagen Slovakia a.s., the Slovak unit of Volkswagen AG, said on January 13 it would build new construction facilities and open a new plant to double its production to 250,000 cars by 2000.
"Following a decision...to double car production, VW Slovakia will in 1999 build new production halls... Construction of new lacquering capabilities will cost more than 400 million marks ($237.5 million)," the company said in a statement.
Volkswagen originally took a stake in its Bratislava car plant, Bratislavské Automobilové Závody (BAZ), in 1992, and became its sole owner in December 1995.

Volkswagen Slovakia a.s., the Slovak unit of Volkswagen AG, said on January 13 it would build new construction facilities and open a new plant to double its production to 250,000 cars by 2000.

"Following a decision...to double car production, VW Slovakia will in 1999 build new production halls... Construction of new lacquering capabilities will cost more than 400 million marks ($237.5 million)," the company said in a statement.

Volkswagen originally took a stake in its Bratislava car plant, Bratislavské Automobilové Závody (BAZ), in 1992, and became its sole owner in December 1995.

"The original plan (in the early 1990s) was to reach an output of 30,000 cars and 200,000 gear boxes (per year)...Last year, production was 125,000 cars and 328,000 gear boxes," VW said.

Despite the rosy outlook for 2000, however, 1999 will mark a transitional period for VW Slovakia. The company will reduce its car output to 112,000 cars, down 13,000 from last year, but gearbox and component production will remain at last year's level, VW Slovakia Personnel Director Jaroslav Holeček said on January 11.

The drop in car output stems from the launch of new production units and investment activities planned for this year. "The completion of production capacities this year should allow a further increase in car production in the new millennium," Holeček said. "This year, VW Slovakia starts production of a new model, the VW Polo."

In 1998, VW Bratislava produced over 125,000 cars. Gearbox production hit 330,000 pieces, and the plant produced over 7 million components.

VW confirmed it was planning to open a new plant in the town of Martin, central Slovakia.

"The company expects to start operations in Martin in the second half of 1999...In the first stage of the operation, VW will install equipment into a 20,000 square-metre plant." The Bratislava plant produces a range of VW cars - most of them for export - including the Passat BV and various Golf models.

Some 40% of the plant's output is exported to Germany. Less than one percent remains on the Slovak market.

The Bratislava plant, which in 1999 plans to add more than 1,300 employees to its current workforce of 5,200, became a joint-venture company at the beginning of the year. "The new company, Volkswagen Slovakia a.s. has taken over all the duties and rights of Volkswagen Bratislava s.r.o. since January 1," the statement said.

Slovakia has attracted far less foreign direct investment than other leading post communist countries. By last year, Slovak FDI since the fall of communism in 1989 was only a little over $1.0 billion. In per capita terms the Czech Republic has received around four times as much and Hungary eight times.

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