VW plans to build major factory in North America

CHICAGO -- Volkswagen says it will build a high-volume auto factory in the USA, or other country "in the North American dollar region," to escape the currency exchange pinch from a weak dollar and strong euro.

The automaker will decide where within "the next five or six months, so please stay tuned," says Stefan Jacoby, CEO of VW Group of America, which includes the Audi luxury brand. He announced the plant Wednesday during media preview days at the Chicago auto show.

The car company operates a plant in Puebla, Mexico, but "Puebla's maxxed out," VW spokesman Keith Price says.

VW pioneered so-called transplant factories in the USA, building about 1 million cars at Westmoreland, Penn., from 1978 to 1988.

What VW calls a "dollar region" plant would be part of an aggressive expansion plan that includes what VW says will be dramatic growth in the USA, where the automaker holds a mere 2% of new-vehicle sales.

"We can't be a global player without having a larger presence in this important market," says Ulrich Hackenberg, member of VW's German board or management in charge of technical development for the VW brand.