USA - Volkswagen commits US$900 Million for the production of an All-New Mid Sized SUV at Chattanooga.

• US$900 million for production of new midsize SUV
• Michael Horn, CEO Volkswagen Group of America: "Clear commitment to Chattanooga location"
• USA still one of Volkswagen's most important markets

The Volkswagen Group has reaffirmed its planned investments at the Chattanooga location and in the production of an all-new SUV for the U.S. market. To that end, the company wants to invest US$600 million in the State of Tennessee alone and creating an additional 2,000 jobs in the USA. 

Production of the new midsize SUV in Chattanooga is scheduled to commence at the end of 2016.

"This clear commitment to the Chattanooga location confirms our engagement in North America and our confidence in the local team. More than ever, we must and will focus on the specific wishes of our U.S. customers so that we can offer them vehicles that are not only convincing, but also inspirational. 

Step by step, that is how we want to win back trust in the Volkswagen brand," Michael Horn, President and CEO of Volkswagen Group of America, said. "The United States of America is still one of Volkswagen's most important markets," Horn continued.

Apart from investment in the production of the new vehicle which is based on the CrossBlue study, a National Research & Development and Planning Center is currently being built at the Chattanooga site. 

The centre will be responsible for steering projects for the North American market. The objective is to create vehicles to meet consumers' changing wishes and expectations even faster and more efficiently by getting closer to the customer.

A further 50,000 square metres is currently being added to existing space at the site to cater for the logistics of producing the new midsize SUV for North America. Production of the new vehicle will be integrated in the existing factory structures.

Volkswagen has already invested more than US$ one billion in its Tennessee plant to date. Over 2,400 employees currently work at the plant; the 500,000th US Passat rolled off the assembly line in the summer.

A further element in the Volkswagen brand's North America strategy is a three-row version of the new Tiguan, which is scheduled to start leaving the assembly line at the plant in Puebla/Mexico in 2017.

USA plant chosen to be new midszied SUV home for Volkswagen.

• Winterkorn: “This model will play a key role for Volkswagen’s presence in North America”
• Volkswagen Group of America to invest approximately $900 million in the project
• Second model to be produced in Chattanooga, in addition to the US-built Passat, starting from the end of 2016
• Approximately 2,000 additional jobs to be created
• Establishment of a National Research & Development and Planning Centre in Chattanooga
• Group Works Council Chairman Osterloh to be named a member of the Board of Directors of Volkswagen Group of America

Within the framework of its Strategy 2018 plan, the Volkswagen Group is expanding its industrial footprint in the US. The Board of Directors of Volkswagen Group of America has decided to award the production of the new midsize SUV to the Chattanooga plant in Tennessee. The Group will be investing a total of approximately US$900 million (€643 million) in the production of a newly developed, seven-passenger SUV, and creating 2,000 additional jobs in the US. About US$600 million (€432 million) will be invested in Tennessee.

“The United States of America is and will remain one of the most important markets for Volkswagen. Over the past few years, we have achieved a lot there. We are now launching the second phase of the Volkswagen campaign in the US. With the midsize SUV, the expansion of the Chattanooga plant and the new development centre, the focus is on the wishes of the US customer. This is also a strong signal for the US as an industrial and automobile production location. The Volkswagen brand is going on the attack again in America,” said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg.

“The Chattanooga-built midsize SUV will allow us to fulfil the wishes of our dealer network, bringing new customers to our showrooms and additional growth for the brand,” said Michael Horn, President and CEO Volkswagen Group of America. “We are eager to be entering this growing vehicle segment with a world-class, seven-passenger SUV from Volkswagen.”

Apart from investing in the production of a new vehicle, the Chattanooga location is to receive a new, independent National Research & Development and Planning Centre of the Volkswagen Group of America for project coordination in the North American market. The objective is to identify customers’ feedback in the market and to integrate them more expeditiously into existing and planned vehicle models. This will lead to the creation of approximately 200 qualified engineers working in Chattanooga. This decision is another element in the investment programme that the Volkswagen Group has launched in the region. From 2014 to 2018, the Volkswagen Group will be investing more than US$7 billion in the US and Mexico. It is Volkswagen’s goal to deliver 800,000 vehicles in the US by 2018.

"Today is an exciting day not just for Chattanooga and Hamilton County but for all of Tennessee, and I want to thank Volkswagen for its significant long-term investment in our state,” Governor Bill Haslam said. “The impact of this announcement goes far beyond the 2,000 new jobs because of the large multiplier effect of the automotive industry, and adding an additional manufacturing line and the National Research & Development and Planning Centre sends a clear signal that Tennessee can compete with anyone in the global marketplace.”

Christian Koch, CEO and Chairman of Volkswagen Group of America Chattanooga Operations, said: “We are proud to be making the new midsize SUV here. This is fantastic news for the plant and proof of the confidence placed in the workforce that does a great job here making high-quality cars every day.”

At Chattanooga, the new SUV will be integrated into existing plant structures. Existing areas in production will be used for the assembly of the midsize SUV. A total floor space of 50,000m² (approx. 538,000 sq ft) will be added to the existing production facility. The midsize SUV, which is based on the CrossBlue concept vehicle, was developed especially for the North American market. The CrossBlue made its global debut at the 2013 North American International Auto Show in Detroit.

Today, Volkswagen also announced that the Chairman of the Group Works Council of Volkswagen, Bernd Osterloh, will join the Board of Directors of Volkswagen Group of America, Inc. "We are pleased that Mr. Osterloh has declared his willingness to play a concentrated role in shaping our US strategy in the future. He will represent the views of the workforce. This is in line with the codetermination culture of Volkswagen, which is one of our key success factors,” Prof. Dr. Winterkorn said.

Mr. Osterloh stated: "It is important for us that our colleagues in the U.S. know that we also care about the production site and the employment in Chattanooga. I am looking forward to my work on the Board. I am determined to uphold the interests of Volkswagen employees in Chattanooga. The North American market offers considerable opportunities; in my opinion, these have not been pursued with sufficient consistency in the past. With today’s decision to produce the midsize SUV in the USA, we are taking a key step.”