Volkswagen announced today that a three-row version of its compact Tiguan sport utility vehicle will be produced at its plant in Puebla, Mexico.
The company will invest $1 billion for the expansion and modernization of its production facilities at the Puebla plant, as well as tooling to produce auto parts at suppliers.
The SUV will be launched in 2017.
Volkswagen’s strategy of technological upgrading, which started with the production of the new Golf on the Modular Transverse Matrix (MQB) platform, goes to the next step with the new Tiguan, according to officials.
“Localization has become key to safeguarding our competitive position on the global market and manufacturing the Tiguan in Mexico will bring production closer to the U.S.-market,” said Michael Horn, president and CEO of Volkswagen Group of America, in a statement. “It is another proof point that Volkswagen is committed to further growth in the U.S. and North American markets.
VW also is investing $900 million in its Chattanooga plant to produce a new midsize SUV.