VW may produce Tiguan in N. America, report says

Volkswagen AG wants to start producing its Tiguan medium SUV model in North America, to help cut costs, a German magazine reported, citing management sources.

Volkswagen already produces Jetta and Passat cars in North America, and a proposal to produce the Tiguan there too may soon be decided on by the board, WirtschaftsWoche magazine reported.

The Tiguan is currently only produced in VW's Wolfsburg plant in North Germany.

By shifting production to the U.S. and using local parts suppliers, Volkswagen can guard against exchange rate fluctuations that can eat away at profits, analysts have said.

Making cars in the United States also allows the company to keep closer track of changing tastes in the world's No. 2 auto market, where consumer trends often originate.

Last week, VW celebrated the opening of a $1 billion U.S assembly plant in Chattanooga, Tennessee, which it hopes will help it to unseat Toyota Motor Corp. as the world's largest automaker.

Production at the Tennessee plant is scheduled to rise to 150,000 vehicles annually by 2012.

It is not yet clear whether the Tiguan would be produced in the new plant, the magazine said. Volkswagen is already building its 2012 Passat car there.

Volkswagen declined to comment on the report.