REFILE-UPDATE 1-Most of Volkswagen $7 bln N. America investment Mexico bound -CEO

Tue Jan 14, 2014 6:34pm EST

PUEBLA, Mexico Jan 14 (Reuters) - Most of the $7 billion that German carmaker Volkswagen AG will invest in North America over five years will go to Mexico, the company's chief executive said on Tuesday.

"Most of it will be invested in Mexico for a new plant for Audi, investment for our new products ... and some of it will go to the United States," CEO Martin Winterkorn said in the central Mexican city of Puebla, where the company has a major plant.

The company also said it might consider selling its Amarok pick-up truck in North America, just days after it announced it would build a new SUV in the region.

"No decision has yet been taken but we are closely observing the pick-up market in order to analyze whether it would benefit our company or not," Winterkorn said when asked whether the Amarok would come to North America soon.

Volkswagen announced the $7 billion investment figure in Detroit on the eve of the North American International Auto Show.

Last year, executives laid the foundation stone in Mexico for an assembly plant for Audi, the premium brand of Volkswagen, Europe's biggest automaker.

With numerous free trade agreements, a cheap, well-educated labor force and proximity to the lucrative U.S. auto market, major automakers have been lining up in recent years to set up shop in Mexico.

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