DAVID Jones Garages has acquired the former Hartwell garage on Newport Retail Park for an undisclosed sum.
Around 100,000 will be spent on refurbishment and the business will be known as Newport Volkswagen Centre.
Managing director David Pugh-Jones said the Newport site would employ 47 people, and there was a possibility of more jobs if performance met expectations.
David Jones Garages has spent the last year developing the 4 million Cardiff Volkswagen Centre at Atlantic Wharf. The success of the project has encouraged the expansion into Newport.
Mr Pugh-Jones said his company planned to boost sales in Newport to around 500 new and 400 used vehicles next year.
Services will include next-day and out-of-hours servicing, with a fleet of 20 courtesy cars to keep customers on the road.
Maintenance or repairs taking less than 20 minutes will be free.
Mr Pugh-Jones said "We are not going to charge customers 35 for fitting a 12.99 windscreen-wiper.
"That simply causes irritation."
Mr Pugh-Jones opened the Cardiff VW centre last November, and it now employs over 100 people.
He said: "Volkswagens are very popular with private motorists and businesses in South Wales."
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