VW will employ 2,000 people and invest as much as $1 billion in the facility, which will include body production, a paint shop and assembly operations with annual capacity of 150,000 cars. The factory will initially produce a new midsize sedan designed for the U.S. to be priced between the Jetta compact and Passat midsize cars.
VW say they chose Chattanooga over sites in Alabama and Michigan because of the region’s infrastructure, supplier base and workforce. Nissan and General Motors have assembly plants in Tennessee, and BMW and Daimler build vehicles not far away in South Carolina and Alabama, respectively.
The company hope to sell 800,000 VW-brand vehicles in the U.S. by 2018 vs. 231,000 last year. Audi brand say they will decide by early next year whether to build their own U.S. plant or perhaps build vehicles at the Chattanooga plant.