Volkswagen announced today that it will begin to produce the next-generation Golf at its Volkswagen de Mexico manufacturing facility in Puebla, Mexico.

Production of the seventh-generation Golf is set to begin by early 2014.

Volkswagen said in a news release today that the plant is part of $5 billion the auto maker plans to spend in the United States and Mexico in the next three years. VW also makes its Beetle and Passat engines in Mexico and is building a plant to make Audi cars. VW also is studying whether to build a new SUV model in either Chattanooga or Mexico.

"The Puebla, Mexico plant offers an excellent economic basis for Volkswagen production operations and is a well-established automotive manufacturing facility with a record of efficiency and high quality," said Hubert Waltl, a member of the Board of Management of the Volkswagen Passenger Cars Brand with responsibility for Production. "With its existing infrastructure, competitive cost structures and free trade agreements, Mexico is the ideal location to produce the Golf for the American market."

VW said it is working to build more than 75 percent of the cars it sells in North America in the U.S. or Mexico.

"For more than 40 years, Puebla has been manufacturing quality Volkswagens for the U.S. and markets around the world and we are thrilled that the next-generation Golf will be added to the production line," Waltl said.

The Volkswagen Golf is the company's best-selling vehicle around the world.