A VW memo says that it is looking to improve its toolmaking divisions and will also be aiming at make better use of excess capacity.
A foundry group business sector may also be set up at the company's Hanover plant to streamline casting technologies.
The plan for the Kassel plant is to develop "a competence strategy for an exhaust system business sector."
The plant will also receive additional funds for the "DQ 200" project, a twin-clutch transmission for small cars.
The VW plant at Emden can already start planning for the Passat generation that comes after the next one. That series (B7) will probably come in 2011.
It is, in particular, looking to strengthen functions that go across different company sectors.