Shortly after announcing that it could cease selling the VW Golf in North America, Volkswagen has unveiled plans to build a $1 billion U.S. production plant in Chattanooga, Tennessee.
The site was decided on after a lengthy review of over 25 potential locations throughout the U.S. and was settled upon at a management board meeting at VW's wolfsburg head office in Germany on the 14th July, and will start production in 2011, with a production capacity of up to 150,000 cars anually, creating up to 2000 new jobs directly at the factory and another 2000 with suppliers and logistic partners.
Volkswagen Chairman Martin Winterkorn said "The US market is an important part of our volume strategy. Volkswagen will be extremely active there." Volkswagen has set out to quadruple its US sales with a strategy aimed at netting it over 800,000 sales there by 2018 – up from 329,000 in 2007.
Volkswagen's US division has posted heavy losses recently due to poor market conditions, and the strength of the Euro against the dollar, and this plant could negate this, as well as producing cars locally, specifically designed for the American market.
It is also hoped that US car buyers will come to think of locally produced cars as domestic products, akin to "buying American" and therefore supporting the countries economy, as they do for other brands with factories in the states such as Toyota, Nissan and Honda.
