Volkswagen Group of America, Inc. announced that it will build a US automotive production facility in Chattanooga, Tenn., where it will produce a mid-sized sedan designed specifically for the North American market.
VW plans to sell 800,000 units in the US by 2018, and the new plant will play a key role, according to Prof. Martin Winterkorn, CEO. Volkswagen sold 230,572 total units in the US in 2007. Initial production capacity for the facility is anticipated to be 150,000 vehicles, including the new mid-sized sedan. Production is scheduled to begin in early 2011.
Last year, Volkswagen outlined a new strategic direction in the US based on five pillars: product, brand positioning, dealer network, organization and local production. As it moved forward to assess the potential for local production, the company considered many other site options and earlier this year had narrowed its search to Alabama, Michigan and Tennessee.
Volkswagen of America received an attractive, comprehensive package of incentives for the new facility from Tennessee Governor Bredesen’s office and the Tennessee Department of Economic and Community Development. The statutory incentives are tied to job creation and capital investment. Additional support includes assistance for public infrastructure and job training.