Volkswagen pins US hopes on Chattanooga plant

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Artist's rendition of the Volkswagen logo.

Volkswagen is depending upon its Chattanooga plant to boost U.S. sales numbers. (Photo Credit: Public Domain/Ralf Roletschek/SITE)

Volkswagen is one step closer to deciding which vehicles it will produce at its facility in Chattanooga, Tenn., reports the Detroit Free Press. The automaker is looking for a new midsize utility vehicle, sized somewhere between the compact Tiguan and the larger Touareg, noted Volkswagen of America CEO Jonathan Browning to reporters following a speech given to the Automotive Press Association.

‘A great opportunity’

Browning trumpeted this point in time as one of “great opportunity” for Volkswagen’s Chattanooga plant.

“If you could give it to me tomorrow, I would take it tomorrow,” he said. “It’s under discussion.”

The Tennessee assembly plant that opened in 2011 has the capacity to build as many as 150,000 Passat vehicles each year. By adding a third shift of 1,000 to the two-shift operation, employment numbers will reach 3,500 in Chattanooga by the fourth quarter of 2012. By 2013, the influx of labor will reportedly boost annual production capacity to 180,000.

Such production will only use half of the available land at Volkswagen’s Chattanooga site. Another planned development phase would increase line production speed and eliminate the potential for bottlenecks occurring in paint and body shops on the premises. This is turn would increase annual production potential to 250,000 vehicles, noted Browning. If that proves insufficient for Volkswagen’s needs, yet another production phase involving a second facility on the property would up production potential to 500,000.

Add 300,000 by 2018

Even if Volkswagen reaches the 500,000 annual vehicle production goal in Chattanooga, it won’t be enough – the wheels of progress must spin faster. By 2018, executives envision annual vehicle production of 800,000 units. Yes, big things will be happening in Chattanooga, Tenn.

“We need 70 percent of volume assembled within North America,” Browning said.

Official approval has not yet been given to expand the plant, but sagging sales numbers due to a lack of inventory over the past six months has Volkswagen on the hunt for solutions.

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Maxed out in Mexico

Volkswagen has a plant in Puebla, Mex., which already uses nearly all of its 600,000-unit capacity to build Beetles and Jettas. Plans to build a new engine plant there will help, but it won’t solve the automaker’s state need for a new mid-sized vehicle. Considering that Mexico has free trade agreements with Latin America and Europe, less than 30 percent of the Volkswagen vehicles made there will go to the U.S. This makes the Chattanooga plant even more important for U.S. sales numbers.

iPhone video of VW’s Chattanooga plant at work

Sources

Detroit Free Press

Left Lane News

The Tennessean

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