Volkswagen returns to U.S. production

Sedan will be made in Tennessee

by Tom Stundza -- Purchasing, 7/16/2008 11:05:00 AM

After a two-decade assembly absence in the U.S., German automaker Volkswagen has chosen Chattanooga, Tenn., for a new U.S. plant that will start production in early 2011 of a midsize sedan developed for the U.S. market. The new $991.4 million plant will have an annual capacity of 150,000 vehicles.

Volkswagen's only other North American plant is in Puebla, Mexico. The company closed its last U.S. production facility near Pittsburgh in 1988. Volkswagen has said the surging Euro pushed along plans for a production facility in the U.S. The Euro's rise has made goods exported from Germany more expensive in North America. David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., tells the Associated Press that the strong Euro dictated Volkswagen's timing. He says making a mid-priced vehicle in Europe “can't be viable.”