Eyeing US Market, VW Plans Tenn. Plant

Company hopes Chattanooga factory will improve market share
By Sam Biddle,  Newser Staff
Posted Jul 16, 2008 8:42 AM CDT
Map locates Volkswagens new Southern auto assembly plant among other foreign plants; 1c x 3 3/8 inches; 46.5 mm x 85.7 mm   (AP Photo)
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(Newser) – Volkswagen will invest around $1.6 billion to build a factory in the US—20 years after the closure of its last plant, Der Spiegel reports. VW hopes to have the plant, located in Chattanooga, Tenn., running by 2011, and operating at a rate of 150,000 cars per year. The company ambitiously hopes to increase US sales to 800,000 by 2018.

Volkswagen hopes the new plant will allow them to make up ground they’ve lost in the American auto market in recent years—the company holds only a 2% market share—as well as reduce the impact of currency fluctuations. The Chattanooga plant will produce a mid-size sedan specially designed for the US market, along with other VW models.