In line with its Strategy 2018 plan, the Volkswagen Group is expanding its footprint in the US. The German carmaker has announced plans to manufacture a new midsize SUV, based on the CrossBlue concept vehicle, at the Chattanooga plant in Tennessee.

The Group will be investing a total of $900 million (Rs 5,401 crore) in the production of the newly developed, seven-passenger SUV. About $600 million (Rs 3,601 crore) will be invested in Tennessee. “The USA is and will remain one of the most important markets for Volkswagen. We are now launching the second phase of the Volkswagen campaign in the US. With the midsize SUV, the expansion of the Chattanooga plant and the new development centre, this is a strong signal for the US as an industrial and automobile production location. The Volkswagen brand is going on the attack again in America,” said Prof. Dr. Martin Winterkorn, chairman of the board of management of Volkswagen Aktiengesellschaft, in Wolfsburg.

Apart from investing in the production of a new vehicle, the Chattanooga plant will see the setting up of a new, independent National Research & Development and Planning Centre of the Volkswagen Group of America for project coordination in the North American market. The aim is to identify customers’ feedback and to integrate it more expeditiously into existing and planned vehicle models. This will lead to the appointment of around 200 engineers in Chattanooga. This decision is another element in the investment programme that the Volkswagen Group has launched in the region. From 2014 to 2018, the Volkswagen Group will be investing more than US$7 billion (Rs 42,014 crore) in the US and Mexico. Volkswagen is targeted sales of 800,000 vehicles in the US by 2018.

“I want to thank Volkswagen for its significant long-term investment in our state,” Tennessee governor Bill Haslam said. “The impact of this announcement goes far beyond the 2,000 new jobs because of the large multiplier effect of the automotive industry, and adding an additional manufacturing line and the National Research & Development and Planning Centre sends a clear signal that Tennessee can compete with anyone in the global marketplace.”

Christian Koch, CEO and Chairman of Volkswagen Group of America Chattanooga Operations, said: “We are proud to be making the new midsize SUV here. This is fantastic news for the plant and proof of the confidence placed in the workforce that does a great job here making high-quality cars every day.”

At Chattanooga, the new SUV will be integrated into existing plant structures. Existing areas in production will be used for the assembly of the midsize SUV. A total floor space of 50,000 square metres will be added to the existing production facility. The midsize SUV, which is based on the CrossBlue concept vehicle, was developed especially for the North American market. The CrossBlue made its global debut at the 2013 North American International Auto Show in Detroit.

Photograph (L-R): Michael Horn, president and CEO of Volkswagen Group of America, William Edward Haslam, governor of Tennessee and Prof. Dr. Martin Winterkorn, chairman of the Board of Management of Volkswagen Aktiengesellschaft at the signing ceremony for the allocation of the new Volkswagen midsize SUV (which is based on the CrossBlue concept).