German auto giant Volkswagen will invest 800 million euros ($1.1 billion) in a new factory near the western Polish city of Poznan, Poland's foreign investment agency said Tuesday.
"The group will invest close to 3.4 billion zloty in Wrzesnia, where it will employ more than 2,300 people" to produce its popular Crafter utility vehicles, the government agency said in a statement.
Volkswagen said in a separate statement on Tuesday that construction of the factory was scheduled to start at the end of 2014 with the first cars expected to roll off production lines in the fourth quarter of 2016.
The new facility "will become the second site in Poland for Volkswagen commercial vehicles after Poznan," where the Caddy delivery vehicle has been in production "for more than a decade," it said.
Poznan is located just 200 kilometres (120 miles) east of the German border.
"With the decision to build the new Crafter in Poland we are setting a new strategic course for our light commercial vehicles," Volkswagen board member Leif Oestling said in the company statement.
"The Crafter is the ideal candidate for all growth markets in the world and will further advance Volkswagen Commercial Vehicles along its path as a globally operating manufacturer," he added.
The Crafter model is now manufactured in Germany at Mercedes plants in Ludwigsfelde and Duesseldorf under an agreement with Volkswagen Daimler, which will soon expire.
The Volkswagen Group already produces Caddy 3 and T5 utility vehicles in Poland, as well as buses and engines.