Volkswagen announced on Monday that its new midsize SUV will be produced in the company’s Chattanooga, Tenn., facility, in addition to the U.S.-built Passat, starting at the end of 2016. Despite a 22% drop in year-over-year sales in the U.S., the German carmaker has announced an approximately $900-million expansion to its existing plant in Chattanooga to accommodate the new production. Volkswagen also announced that the increase in production could create up to 2,000 new jobs in Tenn.
“The United States of America is and will remain one of the most important markets for Volkswagen,” Martin Winterkorn, chairman of the board of management of Volkswagen in Germany, said in a press release. “The Volkswagen brand is going on the attack again in America.”
From 2014 to 2018, the Volkswagen Group will be investing more than $7 billion in the U.S. and Mexico, and hopes to deliver 800,000 vehicles in the U.S. by 2018, the company said.
In addition to the production of a new vehicle, the Chattanooga location will also receive a new, independent research & development and planning center of the Volkswagen Group of America.
