SÃ O PAULO—Volkswagen Truck & Bus on Thursday said it plans to invest about 420 million euros ($447 million) in Brazil over the next five years to introduce new products and modernize its plant in the city of Resende, in Rio de Janeiro state.

The commercial vehicle unit of German auto maker Volkswagen AG said part of the investment will be used to develop connectivity services.

Volkswagen Truck & Bus said it is ready to invest in the South American country that is in the grip of a prolonged recession because Brazil is a key market, and the company believes the worst of the economic contraction is over.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

(END) Dow Jones Newswires

December 02, 2016 01:55 ET (06:55 GMT)