Volkswagen Group's Skoda brand will build Karoq SUVs in a VW plant in Germany to ease overcapacity in its factories in the Czech Republic.
VW's plant in Osnabruek, northwest Germany, will build the compact SUV starting at the end of this year and continuing into 2019 to satisfy high demand for the SUV, Skoda said.
Skoda's production has been squeezed as sales have grown. In the first quarter global deliveries grew 12 percent to 316,176, the company said. Last year Skoda's vehicle sales increased 6.6 percent to 1.2 million.
Skoda said the German production was temporary while the company updates its paint shop at its flagship Mlada Boleslav plant, where it will continue to build Karoq.
The Osnabrueck plant already paints bodies for the Skoda Fabia subcompact. It also assembles the VW Tiguan, Porsche Cayenne and Porsche Cayman.
Skoda CEO Bernhard Maier said at the company's annual results conference in March that that delivery times had grown too long, as much as 8 to 10 months for some markets. Maier also hinted that the company might consider a new factory if production constraints continued.
Skoda is expanding its SUV lineup. The Karoq went on sale late last year.
Early last year, Skoda launch sales of the Kodiaq, its first large SUV and its first model to offer a seven-seat option.
The brand will next year start production of a new small SUV at the Mlada Boleslav plant based on the Vision X concept revealed at Geneva auto show in March. The plant will also build a new electric vehicle starting 2020.