Volkswagen will build a factory in Wrzesnia, Poland, to produce the Crafter commercial van.

Volkswagen is re-jigging the geography of  its European production, adding a $1.1 billion euro van plant in Poland and rearranging output of the Porsche Panamera and Cayenne models, and VW Tiguan.

The plant will employ more than 2,300 people, with production starting in 2016.

Building the Crafter in Wrzesnia about 270km west of Warsaw, will allow VW, which already makes the Caddy and T5 commercial vehicles in nearby Poznan, to significantly reduce its production costs. Up to now Daimler has built the Crafter alongside the Mercedes-Benz Sprinter at its factories in Dusseldorf and Ludwigsfelde in Germany since 2005 where labour costs are significantly higher, but this will end in mid-2016.

Following the conclusion of the van manufacturing co-operation between Daimler and VW, Daimler will use the additional capacity at its Ludwigsfelde and Dusseldorf plants for the next version of the Sprinter.