Volkswagen is making a big push into the smart car market with its announcement this week that it is going to acquire 100 million vehicles by 2025.
The announcement came as a surprise, given the company had been rumored to be preparing to sell off a significant chunk of its business, including its brand.
Volkswagen shares jumped 2.7% on the news, as investors speculated that the company might be planning to make some sort of big acquisition.
Volkswagen Chief Executive Martin Winterkorn said at the press conference that the plan is to buy 10 million vehicles per year, and that they would come from existing dealerships.
The company will also buy more than 1.7 million vehicles from suppliers that have built them for the next decade, and will add 200,000 new vehicles in the U.S. over the next two years, he said.
Volkswagen also will invest $20 billion in new plant and equipment over the course of the next four years, Winterkoren said.
The announcement is expected to come as a shock to many in the auto industry.
Volkswagen had already announced a plan to buy some 200 million cars in 2019, and the company has been working on a strategy to build an even larger factory and ramp up production.
However, the company said it was also working on its plans to bring back some of its old products.
Volkswagen is still working on what it will do with its older vehicles, but said that the first phase would include a full re-imagining of the car brand.
The announcement comes as the auto market is in a tough spot.
It’s been the target of multiple auto recalls in the past year as a result of emissions cheating, and regulators have been cracking down on automakers for decades.
But the car industry has been on a roller coaster ride in recent years.
In 2018, a federal court in California ordered GM to pay $5 billion to settle a class-action lawsuit over its ignition switch defect, and Volkswagen had to pay nearly $10 billion in fines for its diesel emissions cheating scandal.
The next year, Ford settled its emissions scandal by agreeing to buy back nearly 1.3 million vehicles, and Tesla agreed to buy its remaining vehicle factory from General Motors.