Volkswagen Group is planning to spend 19.9 billion Euros (AUD$32.3 billion) in brand expansion and development over the next three years.

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Around half of that money will be invested in Germany on projects like the takeover of the Karmann factory announced on Saturday.

VW will begin production of a new vehicle – rumoured to be the Golf Cabriolet – in 2011, creating more than 1000 jobs by 2014 at the old convertible specialist plant that filed for bankruptcy in April.

In total $21.6 billion will be invested in updating and expanding the product range through property, plant and equipment investment, while a further $7.2 billion will be invested in China.

VW said it expects an average expenditure-to-sales ratio of 6 per cent from 2010 to 2012.

“In the area of powertrains, new engine generations will be introduced that offer additional improvements in performance, consumption and emissions. Automatic gearbox capacity will be aligned with growing demand.”

The remaining $20.3 billion will be spent on research and development and cross-product technology.

“Because of the high quality and cost targets, the new products require modifications to press and paint shops as well as assembly facilities.

“Outside manufacturing, investments are planned mainly in the areas of development, quality assurance, genuine parts supply and IT,” VW said.

The purchase of the Karmann plant is a historical one for VW.

Lying within Lower Saxony – VW’s home state – Karmann was responsible for producing the Karmann Ghia, a Beetle-based coupe-cabriolet.

From 1955 to 1974, Karmann made 445,238 Ghias in the Osnabrueck plant.

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Until recently the Karmann factory was responsible for the production of outsourced convertibles like the Audi A4/S4 Cabriolets, Renault Megane CC and Mercedes CLK Convetible, but since the last CLK rolled off the line in June it has been without work.

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But VW is hopeful that some of the old Karmann employees will back in business when production of the new model commences in less than two years time.

“Employees and former employees of Karmann have extensive experience in the production of small series models, and this experience will be accessed in line with requirements.”