Volvo leases a $20M factory in Brazil

By NICHOLAS KAMM/Associated PressBUENOS AIRES, Argentina (AP) Volkswagen is leasing a $2.3 billion factory in Uruguay for up to a decade, setting the stage for a global factory to make diesel engines in Argentina and other Latin American countries.

The factory, called Volkwagen Argentina, will produce the cars, trucks and buses used by Volkswagen AG and Audi AG in Uruguay and Mexico, as well as other Volkswagen models.

The company is already in Uruguay building a new plant there that will produce electric vehicles.

Volkswagen is also building a second plant in Mexico to make its diesel engines.

Volkswagen said the plant is expected to produce about 3,000 vehicles a year and employ 500 people.

Volkswagen shares jumped more than 10% in early trade.

The plant will produce engines for the VW Beetle, Audi Q3, Passat and VW Passat e-tron, as the company tries to compete with Audi and Toyota in the world’s largest diesel market.

Volvo is already the largest automaker in Uruguay, with 2,600 employees.

Volkswagen has said it is looking for about 1,500 people to join its Argentine operations in the next five years.