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VW Set To Open Tennessee Plant

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On: Mon, May 23, 2011 at 3:36PM | By: Tim Healey

VW Set To Open Tennessee Plant

Volkswagen is getting ready to open its plant in Chattanooga, Tennessee, on May 24. The plant will build the new Passat, and it’s a key piece in VW's strategy to become the world's largest automaker.

The $1 billion factory will eventually build up to 150,000 Passats. The next Passat will be priced at $20,000, about $8,000 cheaper than the European version, thanks to the fact that U.S. wages are lower, the design is simpler, and local content will be used.

The plant and the Passat both mark big steps in Volkswagen's plan to become profitable in the U.S. for the first time since 2002 and pass Toyota to become the world's biggest automaker.

Volkswagen officials say that they need to be successful in the U.S. in order to achieve that goal, and the company began its marketing push with a 2011 Super Bowl commercial featuring a young boy dressed as Star Wars villian Darth Vader. The commercial was a hit, garnering 38 million views on YouTube.

Despite dominance in Europe, Volkswagen's American market share stands at just three percent. The company has a goal of selling 1 million cars in the U.S. by 2018 (including 200,000 from luxury brand Audi), which would be a very large increase from the current 360,000 it sells here now.

The Passat launches in either September or October, and it's a key first step for VW. The Chattanooga plant could eventually make 500,000 cars and SUVs a year, perhaps giving VW another SUV option or allowing Audi to build cars in the U.S.

The company is also working on increasing quality and making products that might appeal more towards American driving habits.

It's a long climb for Volkswagen, but if the company succeeds with its ambitious goals, it might bring new meaning to the word "fahrvergnügen."


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