VW to build Tiguan SUV in Mexico

Volkswagen of Mexico is to invest US$1 billion to prepare its plant in Puebla, Mexico, to assemble a new three-row Tiguan sport utility vehicle (SUV).

According to the company, start of production (SOP) of the new SUV is set for 2016 with sales to follow in 2017.

The investment will cover expansion and modernisation of the plant, as well as tooling for its auto-parts suppliers.

Michael Horn, president and chief executive officer of VW Group of America, said, "With production of the Golf A7 and the Tiguan has now moved to Puebla, and we will build approximately 90 per cent of our products in the NAFTA region."

The Tiguan will be built at a rate of 500 units a day for sale in North and South America, as well as other world markets, but excluding the European Union and China.

The planned expansion of the facility to build the Tiguan will involve adding a highly automated body shop with advanced programming and control systems.

Hitherto VW has been a strong customer of ABB, the Swedish robot builder and it will be interesting to see if the planned expansion gives ABB some more robot business.

VW claims the project will add about US$1 billion annually to its auto-parts purchasing in Mexico, as well as involve employing 2,000 people.

Separately, Audi is looking to produce a second model in North America, according to the Wall Street Journal, citing interviews with Audi global chief executive officer Rupert Stadler and with Audi of America chief executive officer Scott Keough.

Stadler has indicated the second model would need to be a larger one to justify the costs, while Keough indicated it is likely to be an SUV.

The next-generation Tiguan will be developed in two lengths, with North America receiving only the longer version. The vehicle is expected to share the Golf's MQB platform.

The Tiguan arrives after VW's mid-size SUV, which goes into production in Chattanooga, Tennessee, United States, in 2016.

Volkswagen’s Chattanooga Assembly Plant, based in Chattanooga, Tennessee, began production in April 2011, and was formally inaugurated in May 2011. It employs approximately 3,200 workers. The plant has a projected annual production of 150,000 cars^. Production began with a version of the 2012 Passat tailored to the US market.

IHS Automotive forecasts that annual production of the Tiguan will be in the mid-70,000-unit range in the first few years, settling back to the high 60,000-unit range in subsequent years.

Audi is forecast to add the Q6 SUV variant to the same facility under construction to build the Q5. The Q6 is forecast to add about another 40,000 units to Audi's annual production at the facility, which is also expected to include the A4.