Volkswagen Goes Local With Mexico Golf Production

Volkswagen (NASDAQOTH: VLKAY  ) announced today that it will produce its newest Golf model at its Puebla, Mexico, facility beginning in Q1 2014 .

In a company press release, the automaker stressed the importance of localization to (a) avoid currency fluctuations and (b) bring production points closer to consumer markets. All of the seventh-generation Golfs produced in Mexico will be sold in North and South America.

"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 board member Hubert Waltl in a statement. "With its existing infrastructure, competitive cost structures and free trade agreements, Mexico is the ideal location to produce the Golf for the American market." Volkswagen has been building cars in Puebla for more than 40 years.

The decision comes as part of Volkswagen's larger push into North America; the corporation plans to invest more than $5 billion in the U.S. and Mexico in the next three years. Jonathan Browning, president of Volkswagen America, notes that this newest initiative allows his company "to make further strides toward the goal of building more than 75 percent of the cars Volkswagen of America sells in the NAFTA region."

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