Report: Volkswagen Investing $1 Billion in Mexico for Next-Gen Tiguan
Investment Underlines Importance of SUVs to VW’s Strategy
Reuters is reporting that Volkswagen will soon announce a close to $1-billion investment in its Puebla, Mexico plant to prepare it for production of the next-generation Tiguan compact crossover. In addition to the substantial investment, the move is expected to add 1,900 jobs to the Puebla plant, which already employs more than 15,000 workers. An official announcement by VW is expected next week. This follows VW’s announcement that its three-row midsize crossover will be built in Chattanooga, Tennessee, as well as VWAG’s Audi division announcing production of the next-generation Q5 in Mexico. One thing is clear: SUVs are vital to the future fortunes of the VW Group.
The next-generation North American-spec Tiguan will likely offer a TDI diesel option for the first time, a powertrain offered since its launch in European markets. There have also been reports of two different sizes of the new Tiguan being offered, similar to Hyundai’s strategy with the Santa Fe and Santa Fe Sport, with a seven-passenger version being put forth in addition to the standard two-row model. Localizing production in North America will help VW be more responsive to needs of the local market, as well as keep costs down compared to the expensive labor rates in Germany.