Volkswagen de México will invest $1 billion to expand its assembly plant in Puebla to produce a three-row version of the Tiguan compact SUV that will be launched in 2017, the automaker has announced.

Volkswagen de México’s strategy of technological upgrading, which started with the production of the new Golf on the Modular Transverse Matrix (MQB) platform, goes to the next step with the new Tiguan, according to the automaker.

The production capacity for the longer Tiguan will be 500 units per day. This model will be supplied to North and South America, as well as other world markets, excluding the European Union and China.

For production of this compact SUV, new lines will be installed at the Puebla plant. The new body shop will include a high level of automation with advanced programming and control systems. All told, the new buildings will add 90,000 square meters to Volkswagen de México’s Puebla facilities, according to the automaker.

The project will add $1 billion annually to Volkswagen’s auto parts purchasing volume in Mexico. At Volkswagen de Mexico alone, Tiguan production is expected to add about 2,000 jobs, according to the automaker.