VW may announce plans to build SUVs in the US this week

Article by Anita Panait, on January 13, 2014

Volkswagen AG may disclose plans as early as next week at the Detroit Auto Show to produce a new sports utility vehicles at its Chattanooga site in Tennessee, a source privy with the matter told Reuters. The Chattanooga site has been gaining the advantage in the SUV planning stages since September 2013, as several reports say.

"Chattanooga is in the lead" to build the small SUV, executive vice president of VW of America Marc Trahan told reporters after a Sept. 17, 2013 speech to the Automotive Press Association in Detroit. "We've made a significant investment in Chattanooga and it's one that we want to have its full potential realized," Trahan said. More sources have also told Reuters and Bloomberg about the plans this week.

VW's Puebla site in Mexico was also being considered for the SUV production. VW has grown to become third-biggest carmaker in the world, just behind Toyota Motor Corp. and General Motors Co., thanks to significant sales surges in China and Russia.

However, VW seems to be having a hard time penetrating further the United States vehicle market, which is crucial to its goal of becoming the biggest global carmaker by 2018, exceeding both Toyota and GM.

The Volkswagen group is targeting to sell 10 million cars in 2018 -- including 800,000 US deliveries for the core VW brand -- to achieve that goal. VW has been struggling to be competitive in the US due to lack of models that would appeal for consumers in the country.

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