Mexico City – Volkswagen has begun production of its latest Beetle model at its giant plant in the central Mexican city of Puebla, which will be the exclusive manufacturer of the vehicle.

In a speech at the launch ceremony for the new model, President Felipe Calderon said the German’s automaker’s $400 million investment in the rollout “will have a very positive multiplying effect.”

Some 2,000 people will keep their jobs and thousands more “will indirectly experience this multiplying effect,” the president said last month.

“There’s no other word for creating employment in Mexico than the word ‘investment.’ Public investment, like we’re doing in the country’s roads, or private investment, like what Volkswagen is doing in Puebla,” Calderon said.

The president said Mexico is already “among the privileged economies for foreign direct investment,” especially in the automotive sector.

This industry is bolstered in Mexico by the North American Free Trade Agreement, which allows multinational corporations operating there to export vehicles tariff-free to the United States and Canada.

Volkswagen said it plans to manufacture 100,000 units of the redesigned Beetle model in 2012.

This new model replaces the so-called New Beetle, a redesigned version of the original “Bug” that had been manufactured at the Puebla plant from 1998 until 2010.

The latest re-invention of the Beetle is less a “people’s car” than the original, the chairman of the board of Volkswagen Mexico, Andreas Hinrichs, said at the ceremony, adding that it is “rather an automobile for a style of life.”