VW boosts Chattanooga with SUV, R&D

Volkswagen Group is expanding its industrial footprint in the US in line with its 2018 strategic plan by adding a new mid-size sports utility vehicle (SUV).

Volkswagen Group of America (VGA) board of directors (with the blessing of Wolfsburg, of course) has agreed to award the production of the new midsize SUV to the Chattanooga plant in Tennessee.

The Group will invest US$900 million (€643 million) in production of a newly developed, seven-passenger SUV, and thereby create 2,000 additional US jobs. About US$600 million (€432 million) will be invested in Tennessee.

Aside from new vehicle, the Chattanooga location will receive a new, independent VGA National Research & Development and Planning Centre for project coordination in the North American market.

The aim is to quickly identify customer feedback in the North American market and integrate ideas more expeditiously into existing and planned vehicle models.

This new R&D centre will create some 200 qualified engineering posts working in Chattanooga.

This decision is part of the investment programme VW launched in the region. From 2014 to 2018, the VG Group will invest over US$7 billion in the US and Mexico. Volkswagen's goal is to deliver 800,000 vehicles in the US by 2018.

"The United States of America is and will remain one of the most important markets for Volkswagen. Over the past few years, we have achieved a lot there. We are now launching the second phase of the Volkswagen campaign in the US. With the midsize SUV, the expansion of the Chattanooga plant and the new development centre, the focus is on the wishes of the US customer. This is also a strong signal for the US as an industrial and automobile production location. The Volkswagen brand is going on the attack again in America," said Prof. Dr. Martin Winterkorn, chairman of the board of management of Volkswagen AG.

"The Chattanooga-built midsize SUV will allow us to fulfil the wishes of our dealer network, bringing new customers to our showrooms and additional growth for the brand," claimed Michael Horn, president and chief executive officer of VGA. "We are eager to be entering this growing vehicle segment with a world-class, seven-passenger SUV from Volkswagen."

At Chattanooga, the new SUV will be integrated into existing plant structures. Existing areas in production will be used for assembly of the new SUV.

A total floor space of 50,000m² (approx. 538,000 sq ft) will be added to the existing production facility. The midsize SUV, which is based on the CrossBlue concept vehicle, was developed especially for the North American market.

The CrossBlue made its global debut at the 2013 North American International Auto Show in Detroit.