Volkswagen favors using its factory in Puebla, Mexico, as another production site for the new Golf, CEO Martin Winterkorn said.
The company will deal with the question of additional Golf production "in a matter of just a few weeks," Winterkorn told Automobilwoche, a sister publication of Automotive News.
The seventh-generation Golf is expected to go on sale in the United States in 2014.
"The decision will be made this year," he said.
VW has so far built the Golf at German factories in Wolfsburg and Zwickau.
There has been speculation in the auto industry for some time about a possible location for Golf production in the dollar zone. Some observers had given VW's factory in Chattanooga, Tennessee, the edge. The mid-size Passat sedan, specially designed for the U.S. market, is built there.
"Chattanooga has exhausted its capacity," Winterkorn said. "If we expand there, an SUV that ends up roomier than the Tiguan would have a good shot."
The seventh-generation Golf's production in Puebla will reportedly begin at the end of 2014 or in early 2015 at the latest, according to Automobilwoche's online edition. There is a high probability that the five-seat compact will be marketed overseas under the Golf name -- and not as the Rabbit, as was once the case in the United States.
Along with the Chattanooga-built Passat and the Puebla-built Jetta, the new Golf is to be one of the pillars of Winterkorn's strategy for growth in the United States. He has characterized VW as "significantly underrepresented" in the market.
In September, the automaker said U.S. sales of the VW brand rose 37 percent to 323,089 in the first nine months from a year earlier.
VW is also due to build the new Golf in China. That country is VW's single most important market globally. The company plans to launch volume production at its Foshan plant in late 2013.