VW may offset the weak dollar by manufacturing in Mexico

Wolfsburg. Volkswagen plans to significantly increase its purchasing and production in dollar regions.

"The problems that arise from the weak American currency are on the very top of my agenda," group boss Bernd Pischetsrieder told Automobilwoche.

The low US dollar is "currently our greatest burden" said Pischetsrieder.

VW strategists are now considering the complete production of a new high volume model in a dollar region.

The VW plant in Puebla, Mexico, has a capacity to build half a million units but currently has an annual production volume of 300,000 autos.

Pischetrieder said VW has made no decision on which model will fill the gap but said the new Golf V would not be considered, due to the low demand for the car in the USA.

Pischetrieder said assembly of the Microbus, which will be introduced in the US market in 2006, will be at VW's commercial vehicle plant in Hanover.

Pischetsrieder said building a new plant in the USA is "out of the question" while there is still overcapacity within the worldwide VW network.

There are rumors that VW might be forced to lower the price of the new Golf due to low demand and aggressive sales competition from the Golf's main rival, the Astra.

"We will not touch our pricing," said Pischetsrieder.

He confirmed that the launch of the raised-roof version of the Golf, the Golf Plus, has been postponed.

Production start-up should have been last September. Now it will be launched in spring 2005.

The delay is because marketers believe there should be a longer interval between the launch of the Golf sedan and the Golf Plus.

The company also wants to insure the highest possible quality in the manufacturing process.

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