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VW Investing $900 Mil to Expand Tenn. Plant, Add New CrossBlue SUV

German maker will also set up new product development and planning center at Chattanooga plant.

by on Jul.14, 2014

The VW CrossBlue Concept vehicles rolls past the maker's assembly plant in Chattanooga, TN.

After a long delay, Volkswagen officials have finally confirmed plans to expand the capacity of their big assembly plant in Chattanooga, Tennessee to produce and all-new midsize crossover-utility vehicle, a project that will cost the maker about $900 million.

After achieving significant growth earlier in the decade, VW is currently struggling to reverse a two-year sales slump that has threatened to leave it short of the ambitious goals it had set for 2018 when the company was hoping to sell 800,000 vehicles a year in the U.S. Based on the CrossBlue Concept vehicle, the new ute will play a “key role” in VW’s plans for the U.S. and broader North American market, declared the maker’s CEO Martin Winterkorn during an online news conference.

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“The Volkswagen brand will continue to go on the offensive in the American market,” said Winterkorn, who called the U.S. “one of the most important markets” for his company.

The VW CEO also announced that the German maker will add a new product development and planning center at the Chattanooga complex.


VW Postpones Decision on Tennessee Plant Expansion, 2nd Product

But announcement likely before year-end.

by on Jun.26, 2013

VW says the CrossBlue Concept was designed specifically for the US market.

Volkswagen has some big news for Tennessee – but not the news many had expected.  The German maker has invested another $40 million in the state, about two hours from its sprawling Chattanooga assembly complex, to add a new regional distribution center. But the announcement sidestepped the really big decision many have been expecting.

VW has signaled that it will soon decide whether to add a second product line to the U.S. plant – a move that could lead it to double the size of the Chattanooga facility, expanding capacity to as much as 500,000 units annually.

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“We expect a decision in 2013,” Carsten Kreb, communications director for Volkswagen Group of America Inc. said in an e-mail. But no decision has yet been taken as to whether and, if so, which model this could be built at the plant.

However, it appears almost certain – as TheDetroitBureau.com reported last week – that the Chattanooga plant will eventually produce a version of the CrossBlue Concept, a three-row crossover-utility vehicle that would help expand Volkswagen’s presence in the rapidly expanding CUV market.


VW Continues U.S. Expansion

Warehouse project follows new factory opening.

by on Mar.14, 2012

The new VW warehouse will help support the production of the Americanized Passat at the maker's new Chattanooga assembly plant.

A confident Volkswagen Group of America is moving ahead with its brick and mortar expansion in the U.S. With production steadily ramping up at the maker’s new American assembly plant, the German maker will invest another $40 million to build a warehouse in Roane County, Tenn. for distributing domestic auto parts for the Chattanooga-made Passat.

The 400,000-square-foot facility is expected to open by spring 2013 and will employ up to 45 people by 2016.

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Though a relatively small investment compared to the roughly $1 billion Chattanooga plant, it underscores VW’s sharp shift in focus.  Ever since closing an older plant in Westmoreland, Pennsylvania, a quarter century ago, the maker had downplayed the U.S. market.  But company planners now see the States as essential to achieving their global growth targets – VW aiming to be the world’s largest automaker by 2018.


VW May More Than Triple Size of Chattanooga Plant

From bomb bunker to ground zero in the battle for automotive supremacy.

by on Jun.14, 2011

A nearly-completed 2012 Passat gets ready to roll off the line at VW's new Chattanooga plant.

If some of the early construction crews were a little nervous when work began on the new Volkswagen plant in Chattanooga, three years ago, they had a good reason.  In an irony not lost on members of the team overseeing the project, the mounds dotting the abandoned site had once housed World War II – era bunkers where the U.S. military stored bombs that would eventually be dropped all over Germany – perhaps on the VW plant in Wolfsburg, in fact.

To everyone’s good fortune, the bunkers proved empty.  And the fact is, these days, relations are a lot friendlier between the two countries.  But the sprawling facility is still on a war footing of sorts.

After years of dithering over its role in the U.S. market, Volkswagen has made a commitment to more than double its sales by 2018, to at least 800,000 vehicles annually.  Meanwhile, it hopes to bump its worldwide volumes to more than 8 million, Volkswagen AG CEO Martin Winterkorn declaring, the company “continues to have its sights firmly set on capturing pole position in the automotive industry.”

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Chattanooga will play a critical role in meeting that goal – and that means that the plant that formally opened in the Southern heartland, last month, could very well undergo a significant expansion in the very near future.  Indeed, TheDetroitBureau.com has learned, capacity could readily more than triple, according to a senior manager, “if it were appropriate.”


German Automakers Up Their Investments Overseas

Money flowing to China – but also the U.S.

by on Jun.09, 2011

Chancellor Angela Merkel will discuss German investments in the U.S. during a White House visit.

German automakers have stepped their investment in new plants and equipment, according to a new report from the German Trade and Investment Agency – but much of the money is flowing overseas, particularly to China, as well as the United States.

The new Volkswagen plant in Chattanooga, Tennessee is only the latest example of how German makers are globalizing their investments, as is a new BMW plant in China.  Many of the new projects are geared at sustainable mobility projects, according to the report.

“With several world-renowned automakers, Germany has long been a top location for automotive innovation. The paradigm shift to sustainable mobility again confirms Germany’s position as a launch pad for new technologies that can reach markets around the globe,” said Dr. Juergen Friedrich, Chief Executive of Germany Trade & Invest in Berlin.

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BMW investments in China have recently doubled and construction of a new $600 million BMW plant in Leipzig is underway. The facility will soon see electric BMWs rolling off the assembly line, Friedrich said.

Volkswagen inaugurated its $1 billion plant in Tennessee less than two weeks ago and the maker appears to be giving serious consideration to adding a second U.S. plant for its Audi brand.