Better late than never. Volkswagen of America (VOA), which has seen its sales battered because of the lack of a competitive utility vehicle, has take a critical step toward fixing the problem by starting construction of its assembly plant in Chattanooga, Tennessee.
Construction is underway at the VOA’s Chattanooga manufacturing facility in preparation for production of an all-new midsize SUV. The first phase of construction started in early January 2015 and will stretch out over the next two years, VOA officials said.
“This is a very exciting time in the history of Volkswagen Chattanooga,” said Christian Koch, CEO and president of Volkswagen Chattanooga. “A lot of hard work is going into adding this second vehicle line to the plant, but it is crucial to our efforts to move forward in America.”
VOA sales grew rapidly coming out of the 2008-2009 recession, but slowed dramatically in 2013 and stalled completely in 2014 as the preferences of American consumers tilted away from passenger cars, Volkswagen’s strong suit, and leaned toward trucks and utility vehicles.
VW officials are now hoping they are not too late to cash in on the truck boom.
A total of 512,886 square feet will be added to the already existing plant. The assembly, body and paint shops will each undergo a major expansion to accommodate the new SUV line, Koch said.
“The all-new midsize SUV is a vital component in Volkswagen’s growth strategy for the U.S. market, meeting the demands of the customer and dealer network,” said Michael Horn, president and CEO, Volkswagen Group of America.
“We’re thrilled that work has begun on the expansion of our US manufacturing home, Volkswagen Chattanooga, the facility that will be responsible for building the midsize SUV and home of the award winning Passat.”
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The new body shop will add additional space on the north and south sides of the plant, the assembly shop will expand to the west, and the paint shop will add a complete second automated production line. A new warehouse will also be built at the east side of the plant.
In addition, VOA also plans to build a new product development center on its property in Chattanooga. The new product development center will be expected to adapt VW’s global product line to American requirements and tastes.
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The new National Engineering and Planning Center will take up temporary residency in a building adjacent to the factory, while the company is in the process of hiring more than 200 engineers.
Headed by Dr. Matthias Erb, the engineering and planning center will serve as a high-level research and development hub and will house product-related functions such as technical scouting, innovation management, and product management.
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Also in the planning stages is the Volkswagen Visitor Center, which will be located 18 miles from the factory in downtown Chattanooga and is set to open in Summer 2016.
Production of the face-lifted Passat is scheduled to start this summer. The new midsize SUV, which was assigned to the Chattanooga plant last summer, is scheduled to be in production at the end of 2016.