German automaker Volkswagen will start production of the seventh-generation Golf model at its Puebla manufacturing plant in Mexico in the first quarter of 2014.
The next-generation Golf models produced at the Mexican plant will be delivered to the North and South American Markets.
Volkswagen member of the board of management of Passenger Cars Brand Hubert Waltl said that the Puebla plant provides better economic basis for the carmaker's production operations.
"With its existing infrastructure, competitive cost structures and free trade agreements, Mexico is the ideal location to produce the Golf for the American market," Waltl said.
The move is part of the company's plan to invest more than $5bn over the next three years in the US and Mexican markets.
With the investment, Volkswagen plans to open new plants in Silao, Mexico for the production of 1.8- and 2.0L turbocharged EA888 engines.
The investment will also be used in the planned Audi production facility in San José Chiapa, Mexico.
Volkswagen of America president Jonathan Browning said,"Producing the Golf in Puebla, Mexico signals a continued commitment to the North American market and allows Volkswagen to make further strides towards the goal of building more than 75 percent of the cars Volkswagen of America sells in the NAFTA region."
The new Golf is expected to go on sale in the first half of 2014 in the US.
