Volkswagen Chattanooga Plant
Detroit — Volkswagen says it will build a new seven-passenger SUV at its Chattanooga, Tennessee, factory, adding about 2,000 jobs. The facility opened in 2011 and has an annual capacity of 150,000 vehicles. The plant currently produces the Passat, a midsize car, and employs approximately 1,500 workers.
The German automaker says it will invest $600 million in the factory and a new research centre that will employ about 200 engineers.
The new seven-passenger, three-row, mid-size SUV is set to roll off the production lines in Chattanooga in late 2016.The new, mid-sized crossover is based on the CrossBlue concept vehicle shown at the 2013 Detroit auto show. It was developed specifically for the U.S. market using Volkswagen’s new MQB toolkit.
This new vehicle will fill a gaping hole in VW’s U.S. vehicle lineup — which is rather thin at the moment. It is expected to compete against vehicles such as the Honda Pilot, Ford Explorer and Toyota Highlander. There is an expanding demand for crossovers, pickups and SUVs in the U.S. and Volkswagon hopes to capitalize on the demand with this new addition.
The company says the SUV is part of a plan to increase U.S. sales to 800,000 vehicles by 2018. VW sold just over 407,704 vehicles in the U.S. last year, a 7 per cent decline from 2012. This years sales are also down 13 per cent in the U.S. market, which is continually expanding. VWs sales including its Audi, Lamborghini and Bentley brands. This new investment is key to reviving the Volkswagens waning sales in the U.S.
The decision to expand the plant in Chattanooga demonstrates overseas auto executives confidence that U.S. remains competitive despite the rise of auto manufacturing in Mexico, wher luxury brands BMW, Mercedes-Benz and Audi have all announced plans to start production by 2020.
The continual development in this new plant, which is the first U.S. production of VW vehicles since the closure of the Westmoreland assembly plant in 1988, demonstrates Volkswagens commitment to the overseas market. However, their only other North American assembly site is a nearly 50-year-old factory in Puebla, Mexico, that builds small cars such as the Jetta, Beetle and Golf.
