Poland - auto industry: Volkswagen to spend over euro 650 million ($1 billion) on new van plant in Poland

Volkswagen is to spend nearly 3.4 billion zlotys (euro 650 million) on setting up a new plant in Wrzesnia, Poland, which will produce its Crafter large delivery van, the company said on Tuesday.

The plant will employ more than 2300 people, with production expected to start at the end of 2016 following construction of the plant, which is due to begin at the end of this year, Volkswagen said.

"By taking the decision to build the Crafter in Poland, we are setting the course for the strategic realignment of our light commercial vehicles," Leif Oestling, the head of VW's trucks business, said in a statement.

Assembling the vehicle in Poland will allow the German group, which already makes the Caddy and T5 commercial vehicles near Poznan, to significantly reduce its production costs.

Labor costs in Poland's manufacturing industry amounted to an hourly 6.65 euros per worker in 2012, about a sixth of the 36.98 euros in Germany, according to the Cologne-based IW economic institute.

Read  more: Volkswagen to spend over $1 billion on new van plant in Poland - Yahoo News