Months before the full impact of the current global recession kicked in, Volkswagen made a commitment to build a one billion dollar manufacturing facility in Chattanooga, Tennessee. The plant, which will be the first one VW has operated in the US since shutting down its Westmoreland, PA facility in the late 1980s, is expected to build about 150,000 cars annually.
Daytime Fireworks Display Marks Start Of Construction
Yesterday, local and state officials were joined by Volkswagen representatives to begin work on the plant, building a symbolic wall to stress the automaker’s commitment to the Tennessee Valley. In an unusual move, the automaker also launched a daytime fireworks display to herald the start of construction on a plant that may employ as many as 2000 people directly.
The site Volkswagen chose is located on 1580 acres and will soon house several buildings including a body shop, paint shop, assembly and offices. The mid-size model to be manufactured at the plant will be U.S. specific, perhaps based on an existing VW platform but designed more like an American model. Volkswagen says that 30% of the cars will come equipped with the company’s clean burn turbo-diesel technology. The first cars are expected to roll out sometime in 2011.
Volkswagen Aims To Triple Market Share
The Chattanooga plant represents a commitment Volkswagen made last year to triple its annual sales in the US market within the next ten years. That announcement looked overly ambitious when it was first made, but given the decline of Chrysler and General Motors, Volkswagen may be able to step in and grab market share, perhaps well before the first model rolls out. Year to date, Volkswagen says that its US market share surged by 43%
Last month, I reported that VW’s Audi unit decided to not construct an assembly plant in North America for its upcoming Q3 compact SUV, choosing to use VW’s SEAT plant in Martorell, Spain to build the vehicle. Audi officials noted that no additional factory capacity was needed, choosing to grab an underutilized facility in the Volkswagen Group arsenal instead.
The New #1 Automobile Manufacturer?
With the Tennessee plant coming online and other strategic moves underway for Volkswagen — including a pending full merger with Porsche — the German automaker is on track to reach their next goal which is to overtake Toyota as the largest automobile manufacturer in the world. That goal looked unrealistic just months ago, but given Toyota’s own troubles, VW may soon become the new #1.
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