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Volkswagen Confirms Three-Row Tiguan to Be Built in Mexico

Production starts in late 2016.

Volkswagen will soon expand its crossover line with an extended model that seats up to seven passengers. The automaker announced that a three-row variant of the Volkswagen Tiguan crossover will be produced in Puebla, Mexico starting in late 2016.

The new model, which builds off the traditional five-door compact crossover, heads to showrooms starting in 2017. VW hopes to produce 500 units of this model each day in Mexico for sale in North America, South America, and other global markets -- excluding the European Union and China.

To prepare for the launch, VW has invested a cool $1 billion at the Puebla plant to build extra production lines and tooling for auto parts. In total, Volkswagen Tiguan production will employ around 2,000 people in Mexico.

Along with the new Tiguan, VW also produces its seventh-generation Golf at the Puebla plant, and will add production of the new Golf SportWagen there. As VW starts bringing more production to North America, around 90 percent of its U.S.-market products will be built in the NAFTA region. This could potentially help VW reduce the Tiguan's prices, which have been higher than rivals' in the past.

"Localization has become key to safeguarding our competitive position on the global market and manufacturing the Tiguan in Mexico will bring production closer to the U.S.-market," said Michael Horn, president and CEO of Volkswagen Group of America, in a release.

Incidentally, VW has slated another new three-row crossover to be produced at its Chattanooga, Tenn., plant by late 2016. The Cross Coupe GTE concept that debuted in Detroit this year previewed the styling of that midsize crossover model. It's also been rumored that VW is considering a fastback Tiguan as well as a new subcompact crossover.

The standard 2015 Volkswagen Tiguan is shown.