The German automaker has decided to establish a central engineering and product development center in Chattanooga, Tennessee – where the company also has its only US factory – in hopes of spurring sales and delivering timelier product upgrades.
The German carmaker is having mixed feelings about the US auto market – the second largest in the world: 25 percent of Porsche’s worldwide sales are localized here, but the Audi luxury brand only delivers 10 percent of its vehicles to US consumers. And the core Volkswagen brand – responsible for around 60 percent of group deliveries – only counts on the US market for around 6 percent of global sales. “There is work to be done, ” paraphrases Matthias Erb, executive vice president of engineering and planning for Volkswagen Group of America. He is establishing the new engineering and planning center as the central point for US product development in Tennessee, in a drive to lift production, handle purchasing more efficiently and support the sales drive already launched across the country.
Erb, present at the Center for Automotive Research Management Briefing Seminars in Traverse City, Michigan, said the new product development base is “one of the cornerstones for what we are doing in North America.” The German automaker has long had issues with the delivery of vehicles to suit American tastes and is now bidding that a change in policy would alleviate the struggle. The engineering and planning center was announced last year and makes part of the $900 million investment in the expansion of the Chattanooga manufacturing facility that also includes the production of a new midsize sport utility vehicle late next year.