VW near decision to produce SUV at Skoda or Seat plant: official

PRAGUE Tue Mar 11, 2014 6:11am EDT

A Volkswagen logo sign is seen inside the lobby of the U.S. headquarters building of Volkswagen Group of America in Herndon, Virginia, September 18, 2008. REUTERS/Larry Downing

A Volkswagen logo sign is seen inside the lobby of the U.S. headquarters building of Volkswagen Group of America in Herndon, Virginia, September 18, 2008.

Credit: Reuters/Larry Downing

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PRAGUE (Reuters) - Volkswagen (VOWG_p.DE) is close to deciding on whether to produce a new sport-utility vehicle (SUV) for its mass-market brands Skoda and Seat at a plant in the Czech Republic or Spain, a Skoda union leader said on Tuesday.

Czech newspaper Mlada Fronta Dnes reported earlier on Tuesday that the German car group had picked its Skoda plant in the Czech Republic over Spain's Seat as the site to produce the new SUV. An announcement should come by Friday, it said.

But a Skoda union official told Reuters no decision had been made. Skoda officials are due to meet VW Chief Executive Martin Winterkorn on Friday, he said.

"It is being considered but it is still not definite. Everything will depend on the results of a Friday meeting with VW general director Martin Winterkorn," Jarolsav Povsik, the leader of Skoda's union group and a supervisory board member at the carmaker, told Reuters by telephone.

A spokesman for Skoda was not available for comment.

Mlada Fronta Dnes reported VW had already opted for production to begin at the end of 2015 at its Czech unit. Production will be for both Skoda and Seat brands.

VW is striking out in a new direction to boost the image and appeal of its Skoda and Seat brands, moving the former back upmarket while refocusing the latter on Europe after a failed China export strategy.

Skoda and Seat accounted for 13 percent of VW's 9.7 million record sales last year.

Czech financial daily Hospodarske Noviny reported on Tuesday that Prime Minister Bohuslav Sobotka and Industry Minister Jan Mladek would travel on Friday to VW headquarters in Wolfsburg to lobby for the SUV's production in the Czech Republic.

Skoda Auto is the country's biggest exporter and a bellwether for the economy, which is starting to gain traction after a record-long six-quarter recession ended last year.

(Reporting by Jan Strouhal and Jason Hovet; Editing by Mark Potter)

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