VW Will Build Golf Small Car in Mexico

Volkswagen AG confirms it will begin building its next-generation Golf small hatchback at its huge plant in Puebla, Mexico, in the first quarter of 2014. News reports about the plan surfaced last October.

VW says units made in Mexico will be sold in North and South America. In recent years the Golf has been produced exclusively at the company's plant in Wolfsburg, Germany.

The seventh-generation Golf will go on sale in Europe late this year and in the U.S. in early 2014.

Last week the company opened a new $550 million factory in Silao, Mexico, that will supply four-cylinder engines to the Puebla facility and a VW plant in Nashville, Tenn. The facility has annual capacity of 330,000 engines.

Sales of VW brand vehicles surged 35% to 438,100 units in 2012. Group sales in the U.S., which include Audi, Bentley and Lamborghini, rose 34% to 596,100 units last year.

VW is spending $5 billion in North America over the next three years in a bid to boost group sales in the region to 1 million units by 2018. By then the company expects to become the world's largest carmaker with global sales of at least 10 million units.