Volkswagen de Mexico announced a new investment of $118 million to mark the start of the second stage of its engine plant located in the Guanajuato Puerto Interior industrial park. The additional funding will be used to manufacture new components that will be used in a new version of the EA888 turbocharged and direct-injection TSI engine.

With this investment, the factory will be able to produce a new variable camshaft system that improves the performance of the engine and reduces CO₂ emissions, according to the automaker. As part of the expansion, Volkswagen will implement new processes for the manufacture of camshaft components, including complex state-of-the-art technology such as electro-chemical machining and laser surface structuring.

The expansion will add 37,000 square meters to the 120,000 square meters of buildings already constructed at the plant. The construction will start immediately and will continue during 2014. Machinery installation and setup will begin in January 2015. The production of the new engine will begin in the first quarter of 2016, generating 150 new jobs, according to VW.

The Volkswagen engine plant was opened in January 2013, the result of a $550 million investment. Its annual production capacity is 330,000 engines, and it supplies efficient and modern 1.8- and 2.0-liter TSI engines to Volkswagen automotive plants located in Puebla and Chattanooga. As of September 2013, the plant had 600 employees.