Volkswagen will invest $236 million in Brazil auto plant

The new Golf, pictured, is a key model in VW's plan to sell 10 million vehicles by 2020.

SAO PAULO, Brazil (Reuters) -- Volkswagen Group plans to invest 173 million euros ($235.9 million) to build the seventh-generation Golf in Brazil in 2015, VW Brazil CEO Thomas Schmall said.

The new Golf factory in the southern state of Parana will raise Volkswagen's auto production capacity in Brazil by 20 percent to 1,000 vehicles per day, Schmall said after meeting Brazil's President Dilma Rousseff in Brasilia.

Volkswagen currently operates three car and two engine and commercial vehicle plants in the country.

Schmall said construction had already started on the plant.

As Volkswagen brand's best-selling car, the Golf is a key model in VW's plans to boost global sales to 10 million by 2020, particularly in developing markets, including Brazil.

With 3.8 million vehicles sold last year, Brazil is the world's fourth-largest car market after China, the United States and Japan.