Volkswagen has announced a 560 million-euro ($653 million) investment that will lead to the creation of a new SUV for the South American market.

In the coming five years, the investment will be made at the firm’s Pacheco, Argentina production facility. Construction of the new SUV is expected to commence in 2020.

In a statement, Volkswagen revealed that the SUV will be based on its MQB architecture aimed specifically at suiting the requirements and desires of customers across South America. No confirmation has been provided as to what powertrains will be on offer to customers but early reports cite a 1.4-liter TSI and 1.5-liter TSI with cylinder deactivation as two likely candidates.

“We are laying the foundations for the brand’s growth on international markets with Volkswagen’s Transform 2025+ strategy,” VW brand chief executive Herbert Diess said. “South America and Argentina play an important role in this regard. Key elements of the growth strategy are the biggest model offensive in the history of the brand and the systematic regionalization of our business.”

The new SUV will be one of 20 new models set to be introduced by VW before the end of the decade.

Note: VW T-Prime Concept GTE pictured

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