VW Nears Decision on N.A. Plant

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Volkswagen AG is closing in on a decision whether to build a new assembly plant in North America, the auto maker’s top U.S. executive says at the L.A. auto show.

“We are currently investigating the feasibility of additional North American production capacity,” Volkswagen of America Inc. CEO Stefan Jacoby says. “There are a number of factors that we need to consider in this decision and we will make an announcement in the next six months on whether or not we will proceed with this initiative.”

Volkswagen currently operates a plant in Puebla, Mexico, which produces Beetle and Jetta/Bora models for the U.S. and the local market. Through September, output at the facility totaled 294,241 vehicles, according to Ward’s data.

Additional North American capacity would help VWA counter the negative impact on profitability from the strengthening euro and support a renewed emphasis on expanding sales. VW CEO Martin Winterkorn is targeting U.S. sales at 1 million vehicles annually by 2017. This year, VWA has delivered 268,239 cars and trucks through October.

Germany’s Der Spiegel says VW wants to increase worldwide production to 10 million vehicles by 2018, up from 6 million units today. Winterkorn publicly has acknowledged a target of 8 million vehicles by 2010, but is scheduled to unveil a more expansive 10-year strategic plan to VW’s supervisory board tomorrow.