VW to Decide Whether to Build New SUV in U.S.

Volkswagen AG plans to decide in the fourth quarter of this year whether to produce a new crossover vehicle in North America and if so, where, says Frank Fischer, CEO of the company's assembly plant in Chattanooga, Tenn.

Fischer tells reporters at the Center for Automotive Research's Management Briefing Seminars in northern Michigan that if VW goes ahead with the project, production could begin as early as 2015 either at the Tennessee factory or in Mexico.

The company builds VW-brand cars at a huge assembly facility in Puebla, Mexico. Its Audi unit plans to begin making small luxury crossovers in 2016 at a new €900 million ($1.2 billion) plant in San Jose Chiapa, Mexico.

The Chattanooga factory, which builds the VW Passat midsize sedan, has annual capacity of 220,000 vehicles. Fischer says adding crossover production there would create 500 to 1,000 new jobs.

VW officials have said since early 2011 that the brand needs to add a third crossover to its U.S. lineup to help the marque reach its goal of selling 800,000 vehicles in the country by 2018. The company currently sells the compact Tiguan and midsize Touareg crossovers.

CEO Martin Winterkorn reportedly told U.S. VW dealers last month that the company is committed to selling a seven-seat crossover in the U.S. That model expected to be based on the diesel hybrid CrossBlue concept VW unveiled at the Detroit auto show in January.