VW Delays Decision on N. American SUV Production

Volkswagen AG has delayed by at least a month a decision on whether to build its new SUV/crossover in the U.S. or Mexico, unnamed sources tell Reuters.

VW, which unveiled the new vehicle in concept form at the Detroit auto show in January, had expected to announce a production location by now. The company will build the midsize crossover at its existing factory in Chattanooga, Tenn., or at an all-new plant in Mexico.

Reuters' sources say Tennessee has sweetened its bid for the project by offering new tax breaks and infrastructure improvements. The news service estimates the crossover won't go into production in North America until 2016.

Analysts have been urging VW to expand its American product lineup to reverse a U.S. sales slump that began a year ago. VW brand sales fell 7% in 2013 as the overall market grew nearly 8%. Its sales are down 10% this year in a market that has expanded 3%.