Wolfsburg, Germany  -  A plan by Volkswagen to set up a US car plant to make 250,000 cars a year is advancing, according to a German news report Saturday that was partly confirmed by a VW spokesman.

The news magazine Der Spiegel, releasing a story to appear in print on Monday, said the site would in 2010 begin manufacturing a car that was at least 3,000 dollars cheaper than Volkswagen's current family sedan.

Andreas Meurer, a Volkswagen spokesman approached by Deutsche Presse-Agentur dpa, said the site would make a "Passat-sized car specially developed for the US market," but no name had been chosen for the model yet.

Savings would be achieved by downgrading features such as the elaborate live axle used in the Passat.

He said a final decision would be made by the Volkswagen supervisory board in July.

Three US states were in the running to host the plant: Alabama, Tennessee and Michigan. Like other German manufacturers, Volkswagen has been hit hard by the fall in the dollar, making imported products very expensive in the United States.

In a related development, an executive at Volkswagen's main parent Porsche said recruitment was beginning for staff to make an upscale four-door Porsche at a new plant in Leipzig, Germany. The initial output in 2010 would be 20,000 cars yearly.

The magazine Auto Motor und Sport quoted chief marketing officer Klaus Berning as saying the Porsche Panamera car would create 2,100 jobs, including 600 for the Leipzig assembly line and 400 at other Porsche sites.

Suppliers including Volkswagen would hire 1,100.

Berning said Porsche had no plans to manufacture in the United States and he rejected speculation that luxury-oriented Porsche might add a small sports utility vehicle
(SUV) to its range.

"We don't chase volume. We aim to make money with every single car. The bigger a market segment is, the harder that becomes," he said. "So the small SUV is definitely not the way Porsche will be going." (dpa)