Volkswagen to decide on U.S. site by June-magazine

FRANKFURT, Nov 3 (Reuters) Volkswagen, the world's fourth largest carmaker, will decide on whether to build a new assembly plant in the United States by June, the head of group production told German magazine auto motor und sport.

''A plant in the USA is an important statement for our sales strategy. A decision has however not been made yet - this should happen in the first half of 2008,'' Jochem Heizmann said in an interview.

''If we build on a green field as would be the case in the USA it would take us about three years.'' VW's production chief added that a deal with Malaysian carmaker Proton to jointly build small cars for the southeast Asian market could also come in the first half of next year.

Heizmann said that production capacities in the VW plants were essentially fully utilised at more than 90 percent since the company wants to have some breathing space to account for seasonal patterns and the lifecycles of its products.

''We calculate this based on 236 working days a year with a three-shift operation. Were we to use Toyota's method based on 250 days and a two-shift operation, then our utilisation rate would be clearly above 100 percent,'' he said.

Manufacturing depth of VW plants were between 30 and 40 percent depending on the site or the brand of model produced.

Heizmann also said that the company had decided to insource production of front axle modules, reversing earlier plans after an examination of the costs found that it was actually cheaper to build the systems in its high-wage western German plants.

''Instead of being purchased externally, in the future these will be manufactured in our plant in Braunschweig,'' he said.

REUTERS DKS RN1940