Opinion – Eduardo Sodré: Volkswagen Gol is discontinued in 2022: automaker will invest R$ 7 billion in new products

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Opinion – Eduardo Sodré: Volkswagen Gol is discontinued in 2022: automaker will invest R$ 7 billion in new products

Volkswagen announced this Friday (5) a new investment cycle in Brazil. R$ 7 billion will be invested between 2022 and 2026 in the development of a new family of compact cars.

The first will be the new Polo Track, a more affordable version of the hatch that will be produced in Taubaté (São Paulo countryside). The launch is scheduled for next year.

The novelty will mean the retirement of the current Goal. The model sold today has been produced since 2008, having gone through some engine and styling changes since then.

The history of the compact hatch on the domestic market began in 1980, when it was equipped with the 1.3 air-cooled boxer engine from the Volkswagen Beetle. After mechanical changes throughout its first five years on the market, it became a success. It was the best-selling car in the country for 27 consecutive years, from 1987 to 2014.

“The Gol is an icon, like the Kombi and the Volkswagen Beetle. For us it has been an assimilation process, the legislation has changed and this new family of compacts will affect the car in the future”, says Pablo Di Si, president of VW America do South.

“We will continue to produce Gol in 2022, but clearly our strategy will be the MQB platform in the future”, says the executive.

Therefore, the only chance for the Goal to remain in line is to be reborn on the MQB base, the same as the Polo. But this is not the Volkswagen group’s priority, which aligns the operation in Brazil with the global product strategy.

The automaker invests in the digitalization of its vehicles and sales processes. The VW Play multimedia center will equip all cars for sale in the country, including future releases.

Another goal is to accelerate the decarbonization process of products and manufacturing procedures. The company’s national division is now the global center for biofuel technologies.

Hybrid solutions are being developed, which combine engines powered by ethanol and electricity. These options should reach the Brazilian market in 2023, as well as Latin American and Asian countries. India and China are among the main customers.

As for models powered 100% by electricity, the president of Volkswagen South America sees it as a complementary strategy. “To have an electric car factory [na América do Sul], it would be necessary to invest billions of euros. So let’s get the best from each region and try to export.”

In other words, Brazil should become a consumer and export hub of hybrid technologies, but it will import purely electric models.

The investment announcements come in a year of recovery for Volkswagen, which projects to end 2021 with a profit and positive cash flow in Latin America. According to Pablo Di Si, this has not happened for many years. The improvement in profitability comes despite the crisis caused by the shortage of semiconductors.

The brand has gone through a series of stoppages due to lack of parts. The company produces in a single shift at the factory in São Bernardo do Campo (Greater São Paulo). The reduction in volume took effect on Wednesday (3) and affected 1,500 employees, who are on layoff (temporary suspension of employment contracts).

The current crisis encourages the company to produce new components in the region. Factories located in Argentina are included in this process, which should reduce idleness at the plants in the medium term.

The new models that will be developed in South America will focus on profitability – a strategy that, when combined with new safety and emission reduction requirements, translates into higher-priced cars.

“But things are not permanent, demand fluctuates, and commodity and logistics costs will not continue to rise as they are now. What has happened in recent months is ridiculous due to the strangulation of the chain,” says Pablo, who highlights the sharp increase in steel prices as one of the reasons for the increase in the price of new cars.

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