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Volkswagen’s board is set to decide whether to transfer the production of the Tiguan compact crossover in North America to reduce costs, according to German magazine WirtschaftsWoche, citing sources in management. Other models that Volkswagen assembles in North America include Jetta and Passat cars. Currently, Volkswagen builds the Tiguan only in the Wolfsburg plant in North Germany. Analysts say that by moving the production to the U.S. and using local parts suppliers, the company will be able to protect itself from exchange rate fluctuations.

VW will also be able to price the Tiguan more competitively if it’s built in North America, according to Autonews. Another advantage is that by building the cars in the U.S., the company will be able to monitor the changes in the trends. This is where trends frequently originate. Volkswagen has recently opened a $1 billion U.S assembly plant in Chattanooga, Tenn. — part of VW’s strategy to take over Toyota’s position as the world's largest automaker.

The Tennessee plant is expected to produce 150,000 vehicles annually by 2012. The magazine said that it’s uncertain if the Tiguan will be built in the new plant. The 2012 Passat car is already being produced there. Volkswagen has yet to comment on this report. [via - 4wheelsnews]

2011 Vw Tiguan Facelift