Volkswagen de Mexico announced November 7 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.

VW explained 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, according to VW, improves the performance of the engine and reduces CO2 emissions.

As part of the expansion, Volkswagen said it 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.

VW’s Guanajuato Puerto 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 1.8- and 2.0-liter TSI engines to Volkswagen automotive plants located in Puebla and Chattanooga.