• 7-passenger model will be key addition to VW's U.S. lineup
  • Production in Chattanooga to begin in late 2016
  • VW to invest approximately $900 million in the project, creating 2,000 new jobs in Tennessee

Volkswagen is expanding its manufacturing footprint in the U.S. with its decision to build a new midsize SUV at the company's Chattanooga, Tennessee, plant. The 7-passenger model will be a key addition to the manufacturer's U.S. lineup, with production beginning in late 2016. The automaker will fund the project with approximately $900 million, of which $600 million will be invested in Tennessee. The region will also benefit from the creation of around 2,000 new jobs. In addition to the U.S.-built Passat, the new SUV would become the second vehicle to be built in Chattanooga by VW.

"The Chattanooga-built midsize SUV will allow us to fulfill the wishes of our dealer network, bringing new customers to our showrooms and additional growth for the brand," said Michael Horn, president and CEO of Volkswagen Group of America. "We are eager to be entering this growing vehicle segment with a world-class, 7-passenger SUV from Volkswagen."

At the manufacturing plant, existing areas of production will be used for the assembly of the midsize SUV. A total floor space of 538,000 square feet will be added to the production facility to accommodate the additional equipment and personnel. VW's midsize SUV will be based on the CrossBlue concept vehicle, which was specifically developed for the North American market and unveiled at the 2013 North American International Auto Show in Detroit.

"The Volkswagen brand is going on the attack again in America," said Prof. Dr. Martin Winterkorn, chairman of the Board of Management of Volkswagen AG in Wolfsburg, Germany. From 2014 to 2018, the company will be investing more than $7 billion dollars in the U.S. and Mexico. It is Volkswagen's goal to deliver 800,000 vehicles in the U.S. by 2018 and claim a larger share of America's automotive market.

What it means to you: For those looking for an SUV in the next couple of years, it may be worth waiting to see VW's upcoming offering.

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Jessica Shea Choksey is an automotive journalist and former writer/reporter for the PBS/Discovery Channel television series "MotorWeek." She began her career in journalism as an editor for numerous magazines and publications mainly outside of the automotive field. Jessica currently resides with her family, in Southern California.

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