Volkswagen has scored quite a hit with new products like the Passat that have been retuned for the American market. But the maker still retains one frustrating German habit – delaying key product launches in the U.S. until long after they’re already on the road back in the European home market.
So, it seemed like we might be in for some good news when we heard that production of the seventh-generation VW Golf would be shifted from Germany to Mexico. Unfortunately, we still won’t get the G7 model until sometime during the first half of 2014, still a year late.
But VW is promising that the shift to the Puebla plant will help it better sync the launch of future generations, as the maker has come closer to doing with the bigger Passat line which is now being produced at the Volkswagen plant that opened in Chattanooga, Tennessee in 2011.
By turning to Puebla – which already produces the current VW Jetta model — there’s another advantage for Americans, at least once the Golf does arrive here. It should minimize the impact of lopsided exchange rates that have been a significant burden on manufacturers – and buyers – of European vehicles.
“The Puebla, Mexico plant offers an excellent economic basis for Volkswagen production operations and is a well-established automotive manufacturing facility with a record of efficiency and high quality,” said Hubert Waltl, Member of the Board of Management of the Volkswagen Passenger Cars Brand with responsibility for Production. “With its existing infrastructure, competitive cost structures and free trade agreements, Mexico is the ideal location to produce the Golf for the American market.”
Mexico, in fact, has more free trade agreements than any other country in the world except for Israel, and that further encourages manufacturers like VW – along with low wages – to expand carmaking operations there. Notably, VW’s upmarket sibling brand Audi is now setting up an assembly plant “South of the Border,” and will use it as a lower-cost global base.
Even before getting the new Golf, the Puebla plant produced more than 600,000 vehicles last year, 86% for export. Employment, at nearly 19,000 hourly workers, might seem excessive for that output but the factory also produces a variety of body panels and components for the vehicles it assembles, more in line with the way manufacturing complexes used to operate in the U.S. and Europe.
Collectively, the Volkswagen Automotive Group plans to invest $5 billion in both the U.S. and Mexico over the next three years. Along with expanding the Puebla operation to handle Golf, the maker is also opening a new engine plant in Silao to handle the 1.8-liter and 2.0-liter turbocharged engines that will go into the G7 Golf.
The goal is to increase to 75% the number of vehicles sold in the North American market that are actually produced in NAFTA, noted Jonathan Browning, President of the Volkswagen Group of America.
The gen-7 Volkswagen Golf was revealed last September during the Paris Motor Show. Routinely one of the world’s best-selling vehicles, the maker hopes to increase its appeal by improving both performance and fuel-efficiency, among other claims.
The new Golf, which should be marketed in the U.S. as a 2015 model, features a markedly lighter body and platform – the G7 among the first models to be developed using the modular MQB “architecture” that will be shared by a wide range of products sold across the various Volkswagen AG brands.
The maker chose a relatively evolutionary approach to the hatchback’s styling, though it has significantly refined the interior, including a newly updated infotainment system.
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