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VW to Invest $1 Billion in Mexico Plant Expansion for Three-Row Tiguan

March 10, 2015
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Volkswagen is bringing the production of its Tiguan compact crossover to Mexico. The automaker announced on Monday that the three-row version of the crossover will be manufactured at its production plant in Puebla. The production of the longer Tiguan will start in 2016, and the vehicle will be launched in different markets in 2017.

To prepare for the additional Tiguan capacity, the German automaker will invest $1 billion to expand its Puebla manufacturing facility (rendering seen above). Volkswagen Mexico CEO Andreas Hinrichs revealed that the investment will be used mostly for the installation of new high-technology assembly lines and will also generate approximately 2,000 additional jobs.

VW noted that the investment will not only benefit the company. It will also be used to help the automaker’s auto parts suppliers, which will need to retool their own plants to support the production of the new Tiguan.

According to the automaker, daily output for the three-row Tiguan will be 500 units. Hinrichs said that the plant will build about 1 million Tiguans at the plant over a period of 8 years. The Puebla-made crossovers will be sold in Mexico, North and South America, as well as other world markets. However, these will not be shipped to China and the European Union.

The Mexico plant currently builds the Volkswagen Golf compact car, specifically the model underpinned by the automaker’s MQB or Modular Transverse Matrix platform. The same architecture will underpin the next Tiguan.

The introduction of the next-generation Tiguan is part of VW’s efforts to boost sales in the United States. Crossovers and SUVs are more popular than ever in the U.S. market, and the auto giant aims to take advantage of high demand by expanding its vehicle lineup.

The new Tiguan is expected to arrive in U.S. showrooms in the second quarter of 2017, following the arrival of a new mid-size crossover. The vehicle, which is still unnamed at present, is said to be larger than the Tiguan. The forthcoming CUV will not be underpinned by the same architecture as the Tiguan; it will reportedly ride on a different version of the MQB platform.

VW opened the Puebla plant in 1964. According to figures from the country’s automotive industry association (known as AMIA), the factory built 475,121 of the 3.2 million vehicles manufactured in the country in 2014.

AMIA said that Mexico is the 7th largest vehicle manufacturer and the 4th largest auto exporter in the world. More than 80 percent of the vehicles built in the country are sold in different overseas markets.

Photo credit: © Volkswagen of America, Inc./ media.vw.com

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