More stories related to 2005 NAIASDETROIT – Seeking ways to offset the negative impacts of the strong euro and weak U.S. dollar, Volkswagen AG says it will move to increase purchasing from North American suppliers within the next two years.

Boosting the dollar-based component content of vehicles will help the auto maker create a “natural hedge” to combat the currency problems on its balance sheet, VW CFO Hans Dieter Potsch tells Ward’s at the North American International Auto Show here.

“We need to build our North American supply base, and that could take a 2-year execution,” Potsch says.

The German auto maker also plans to ask its existing global suppliers to shift production of key components to North American facilities, where applicable. This should provide an additional cushion to the currency effects.

Potsch says VW currently has a small research and development presence in the U.S., but plans are progressing to boost those ranks in short order to identify additional supply opportunities within North America.

“We need some additional resources in terms of design and engineering in North America,” he says. “We need to move R&D closer to the point of (part) production.”

kekelly@primediabusiness.com