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Tuesday, 07 June 2011 16:02

Volkswagen Opens Chattanooga, Tennessee Plant

Volkswagen is jumping into the U.S. auto market by opening a new plant in Chattanooga, TN.

At the grand opening of the plant on May 24, the German automaker presented the 2012 Passat as the key to building U.S. sales to 1 million units by 2018. The $1 billion plant has been producing cars since April.

The new Passat will go on sale in Q3 of 2011 for $20,000 a car. That's about $7,000 cheaper than current models built in Germany and close to the prices of such competitors' models as the Ford Fusion, the Toyota Camry, the Honda Accord and the Hyundai Sonata.

Jonathan Browning, president and chief executive officer of Volkswagen Group of America, said the automaker wants to make German engineering more accessible to North American buyers.

"The Passats produced here in Chattanooga will be a key enabler to our growth, allowing us to compete in the core of the midsize sedan segment," Browning told reporters before the unveiling of the plant, according to the Associated Press.

Volkswagen intends to produce 150,000 sedans annually at Chattanooga for the American market, a big jump for a car that has only hit a peak of 80,000 units annually sold in the U.S. in its history.

"Das auto is finally back in the States," declared Martin Winterkorn, chairman of the board of management for Volkswagen AG, the parent company of Volkswagen, according to the Associated Press.

The plant itself has energy-efficient design measures including LED lighting and rainwater recycling. Frank Fischer, who heads VW's Chattanooga plant, told the Associated Press that the complex uses 35 percent less energy than a standard automotive plant.

When Volkswagen selected Chattanooga as the site of their new American plant, they knew that the only way to make a dent in the US car market was producing American cars, said Fischer.

"You have to be a local producer to also be in the market," said Fischer.

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