Volkswagen announced today that it will build its new seven-seat crossover at its Chattanooga, Tenn. plant.
Despite being the worlds number two automaker, Volkswagen is having a hard time in the U.S. market and the company hopes a large utility vehicle that will sit above the Touareg will help shore up its sales here. The mid-size sedan segment expanded from roughly 7500,000 in 2009 to about 1.4 million currently.
“The Chattanooga-built midsize SUV will allow us to fulfill the wishes of our dealer network, bringing new customers to our showrooms and additional growth for the brand,” VW Group of America CEO Michael Horn said. “We are eager to be entering this growing vehicle segment with a world-class, seven-passenger SUV from Volkswagen.”
Volkswagen’s yet-unnamed SUV will begin rolling off Volkswagen’s Chattanooga assembly line by the end of 2016, the company said today. Horn also said the MQB-based crossover will be offered with a diesel variant.
Apart from announcing the official decision to build the SUV there, Volkswagen also announced a commitment to invest $7 billion in its U.S. operation by 2018 including a new research and development facility in Tennessee that will employ 200 engineers. Early reports suggested that Volkswagen was leaning toward manufacturing the SUV in the U.S. over its Puebla, Mexico plant where the seventh-generation Golf is being built for this market.
“The Volkswagen brand is going on the attack again in America,” Volkswagen CEO Martin Winterkorn said today.
The news also means that VW’s Tennessee facility will be tooled up to build MQB-based vehicles by 2016 including the next-generation Passat. Horn expects the new SUV to become one of Volkswagen’s key sales pillars in the U.S. along with the Jetta, Passat and Tiguan compact crossover.
Production of the new SUV alone will merit an investment of about $900 million in Tennessee and 2,000 new jobs, the company said today.
“The United States of America is and will remain one of the most important markets for Volkswagen,” Winterkorn said. “We are now launching the second phase of the Volkswagen campaign in the US.”
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