Volkswagen announced on Monday that it is planning to invest $340 million to construct a new sport utility vehicle at its Chattanooga, Tennessee, plant in the United States as demand boosts for larger vehicles.
It will build a five-passenger SUV that will be branded as part of the automaker’s Atlas family. A concept version will be revealed next week at the New York International Auto Show, Volkswagen stated.
“We are not just committed to this market, we are committed to our U.S. manufacturing home in Chattanooga, Tennessee,” it stated.
Tennessee Governor Bill Haslam stated the automaker in Chattanooga had grown “from a single vehicle producer, starting with the Passat, into what it is today – a thriving U.S. manufacturing operation that can produce three models, and counting.”
The investment announcement is good news for the U.S. car industry at a time when it is bracing for the impact of higher steel and aluminum tariffs on metal produced outside North America. Haslam informed reporters last week the tariffs could bring more costs to manufacturers, especially automakers, that could be “very harmful.”
Volkswagen stated in February that 54 percent of its total own-brand volume sales were SUVs. together with a new seven-passenger Atlas that went on sale last year, Volkswagen also revealed an all-new 2018 Tiguan SUV last year. Before 2017, most of VW’s U.S. own-brand sales were cars.