Volkswagen is considering building the Passat in Mexico, according to sources in Germany. The weak dollar versus the euro is prompting Volkswagen to move more US-bound vehicle production into the NAFTA area.
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A rise in the value of the euro to above US$1.25 has triggered the change of strategy on Passat.
Volkswagen currently only assembles the Passat in Germany, at its Emden plant. Cars are exported globally from there. By producing in Mexico for the North American market Volkswagen could lower its foreign exchange risk.
Reinhard Jung, head of production for the Volkswagen brand told Automotive News last week that any time the euro’s value rises above US$1.25 it is a financial strain for Volkswagen.
Passat production in Mexico would be likely to start by the end of the decade, sources in Volkswagen say.
