VW Mulls U.S. Sales, Production of Midsize Crossover

Volkswagen AG will decide by year-end whether to add a third crossover vehicle to its U.S. lineup and where in North America to build it.

CEO Martin Winterkorn says the midsize model would fit between the fullsize Touareg ($43,000) and compact Tiguan ($23,000).

Earlier this week VW used the Sao Paulo auto show to unveil a possible fourth crossover, the subcompact Taigun, in concept form. Observers predict the four-seater will go into production in two years, but they say the vehicle is too small for the North American market.

Winterkorn says the new midsize crossover could be produced at VW's new assembly plant in Chattanooga, Tenn., which makes the Passat midsize sedan. That factory has capacity to build 220,000 vehicles and is expects to produce 180,000 units in 2013.

But Winterkorn says other locations would be considered if the company decides to produce the midsize model. One contender is the factory VW's Audi unit expects to open in Mexico in 2016 to make Q5 small crossovers. VW also operates a huge car assembly plant in Puebla, Mexico, that makes Beetle coupes and Jetta sedans.