VW may produce Tiguan in North America -report

FRANKFURT Sat May 28, 2011 6:46am EDT

FRANKFURT May 28 (Reuters) - Volkswagen (VOWG_p.DE) wants to start producing its Tiguan model in North America, helping to trim costs, a German magazine reported, citing management sources.

Volkswagen already produces Jetta and Passat cars in North America, and a proposal to produce the Tiguan there too may soon be decided on by the board, WirtschaftsWoche magazine reported in a prerelease from its Monday issue.

The Tiguan is currently only produced in Volkswagen's Wolfsburg plant in North Germany.

By shifting production to the United States and using local parts suppliers, Volkswagen can guard against exchange rate fluctuations that can eat away at profits, analysts have said.

Making cars in the United States also allows the company to keep closer track of changing tastes in the world's No. 2 auto market, where consumer trends often originate.

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Volkswagen last week celebrated the opening of a $1 billion U.S assembly plant in Chattanooga, Tennessee, with the help of which it hopes to unseat Toyota Motor Co (7203.T) as the world's largest automaker.

Production at the Tennessee plant is scheduled to rise to 150,000 vehicles annually by 2012.

It is not yet clear whether the Tiguan would be produced in the new plant, the magazine said. Volkswagen is already building its 2012 Passat car there.

Volkswagen declined to comment on the report.

(Reporting by Josie Cox and Jan Schwartz.; Editing by John Stonestreet)