At a time when most automakers are slashing capacity and idling plants amid recession, Volkswagen AG (VOW.XE) is planning to boost production at its new U.S. plant and its Mexican plant as part of a push to triple its U.S. sales by 2018.

The core VW passenger car brand targets sales of 800,000 vehicles a year in the U.S. in 2018. It expects to produce 300,000 cars locally and import 375,000 from its Mexican plant in Puebla and 125,000 from Europe, according to a company document reviewed by Dow Jones Newswires.

At the same time, Volkswagen plans to export 125,000 different models from North America to Europe in 2018, according to the document.

A Volkswagen spokesman said the 2018 sales targets remain unchanged and declined to comment further.

Volkswagen, Europe's largest automaker, currently is building a new plant in Chattanooga, Tenn., for the production of a mid-sized sedan in 2011 with initial capacity for 150,000 cars annually. It will invest up to $1 billion (EUR620 million) in the plant and create about 2,000 jobs. Analysts view the company's growth targets in the U.S. as ambitious, given competition in the deteriorating market.

The Wolfsburg-based automaker closed its last U.S. plant in Westmoreland, Penn., in 1988 due to underutilization amid sluggish sales.

Volkswagen sees ramping up production and purchasing in dollar-denominated economies as crucial for making its U.S. operations profitable after huge losses in recent years. Such moves would lower its exposure to currency fluctuations, which have been a major concern for foreign manufacturers.

Growth in the U.S. is a cornerstone of Volkswagen's global expansion, which includes outpacing Toyota Motor Corp. (7203.TO), the world's largest automaker by sales.

Volkswagen's relatively small exposure to the U.S. market and strong presences in China and Brazil helped it to narrow the gap in the first quarter.

Toyota's global sales fell 27% in the first quarter to 1.8 million vehicles, keeping it ahead of Volkswagen as the top-selling automaker in the world.

Volkswagen last week reported an 11.4% fall in sales to 1.39 million as the downturn in major auto markets took its toll. But the company saw fewer problems than Toyota and General Motors Corp. (GM), partly due to a favorable global sales mix. GM is yet to release first-quarter results.

Volkswagen expects the U.S. auto market to total 17.3 million vehicles in 2018 compared to 13.2 million last year, and aims to hike its market share to more than 6% from about 2% now, according to the document.

It plans to triple annual U.S. car sales to a total of 1 million a year, with premium brand Audi AG (NSU.XE) accounting for 200,000 cars.

However, Audi last week postponed a decision on manufacturing cars in the U.S., which was previously expected to be made this summer, citing market woes.

A top-level Volkswagen executive said inevitably Audi would have to produce cars in the U.S. as part of its global expansion strategy as the current weakness of the dollar against the euro was likely to persist in the foreseeable future. A weak dollar hurts the profitability of imported cars.

The executive said producing Audi cars at Volkswagen's Mexican plant in Puebla would be "a pretty bad idea" as this might cause a conflict with its marketing in the U.S. as a luxury brand.

Audi executives have admitted that growth in the U.S. was crucial to reach its mid-term growth targets. Audi has enjoyed strong growth in recent years, especially in Asia and Europe, but still lags German peers BMW AG (BMW.XE) and Daimler AG's (DAI) Mercedes-Benz brand in U.S. sales.

In 1986, safety concerns over some models shattered Audi's reputation in the U.S. and sales nose-dived. Federal authorities were unable to identify any mechanical defects, but numerous legal disputes have turned Audi's U.S. recovery into an uphill battle.

 
   Company Web site: www.volkswagen.com 
 
   -By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com