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Volkswagen officials in the company's Brand Product Strategy Committee โ€” headed by Wolfgang Bernhard โ€” recommended a new compact SUV should be built at the Palmela plant in Portugal from 2007, and saw fit to issue a press release stating their opinion. The move, the committee says, would reduce costs over the alternative, VW's Wolfsburg plant in Germany, by around $1,000 per vehicle. Bernhard also noted that the deadline for the decision is September 26 to meet production and tooling milestones. Could be that Bernhard, who also sites on the company's management board, is sending a message to trade union bosses in Germany that they had better plan to renegotiate the company's latest wage contract, or VW's harsh cost-cutting strategies will get a bit harsher.

More spy photos at German Car Fans

Volkswagen Gets Competitive: New Products Aim for Japan; Volkswagen Puts Upcoming Compact Off-Roader on Hold; Costs Face Slashings As VW Forwards Plan to Reverse Misfortunes [internal]