Volkswagen to Build Midsize Vehicle at Chattanooga Facility? image

Volkswagen plans to build a midsize SUV for the US market at the new facility in Chattanooga, Tennessee.

The company said it needs a vehicle larger than the compact Tiguan and smaller than the Touareg. If the company decides to build such a vehicle, it will certainly manufacture it at the VW’s Tennessee assembly plant in Chattanooga, opened in 2011, which offers a capacity of 150,000 Passsats annually.

“It’s a great opportunity,” said Jonathan Browning, CEO of Volkswagen of America. “If you could give it to me tomorrow, I would take it tomorrow,” he said.

Volkswagen adds 1,000 employees as a third crew to the two-shift operation at the plant, bringing total employment to 3,500 workers. These extra workers will increase capacity to 180,000 units annually until 2013. In phase II the company plans to invest in upgrading the line speed and to eliminate bottlenecks in the paint and body shops, bringing capacity to 250,000 units annually. If needed phase III will mean building a second plant on the same property to boost capacity to 500,000 units annually.

The company plans to reach the target of 800,000 units annually by 2018, but to reach this goal Volkswagen needs to introduce a new model which will boost sales.