A source said that Volkswagen AG will soon announce a plan to construct an engine plant in Mexico to supply vehicles assembled in North America. When asked about the rumor, a VW spokesman said that the company will be making an announcement but declined to provide details.
The source said that the new facility will supply an existing VW plant in Puebla, located 75 miles southeast of Mexico City, as well as one that will soon open in Chattanooga, Tenn.
What the Puebla plant produces are the VW Jetta and New Beetle for the US. It also builds other models for the markets in Mexico and Latin America. Production of a new mid-sized sedan is expected to start at the Chattanooga plant early next year.
The source added that the new plant will be building passenger-car engines that will meet US emission standards set for 2013. There had a report from a local newspaper revealing that the plant is located about 250 miles northwest of the Mexican capital, in the central Mexican state of Guanajuato.
This report from the city of Leon edition of the Mexico City newspaper Milenio cited “federal government sources” who supposedly said that Guanajuato state has won the race for the plant. The grand announcement from VW is expected to be made tomorrow at Los Pinos, the capital’s presidential residence.
The VW source declined to confirm the location of the plant nor where the announcement will be held. Last July, Jochem Heizmann, a member of Volkswagen Group’s executive council, visited Mexico.
He said that the company plans to spend $1 billion in Mexico over three years. He had also divulged that the group plans an engine plant in North America but he didn’t give a location. [via autonews - sub. required]