Volkswagen’s plan for building its $1 billion Chattanooga auto assembly plant remains “on schedule,” an official said Thursday, even as a contractor readies to start construction of the first structure.

“There are no changes in our Chattanooga plans and the plant continues to move forward,” said Jill Bratina, Volkswagen Group of America’s corporate communications director. “Physical work on the paint shop will begin in the coming weeks.”

Detroit-based Walbridge, awarded the $30 million paint shop contract Wednesday, is mobilizing, said company spokeswoman Terry Merritt.

“It will start progressing right away,” she said, adding there will be local subcontractors hired for the paint shop project.

Thursday, top VW managers were to have met in Germany to discuss company cost-cutting measures, according to a Reuters news report last weekend that quoted the weekly Automobilwoche. The report said executives were to review production plans for its factories in Chattanooga; Pune, India; and Kaluga, Russia.

Ms. Bratina said Walbridge has already begun working to get suppliers aligned for the building of the paint shop to go up at the Enterprise South industrial park.

VW’s request for proposals process for builders on the project provides flexibility to award one or multiple contracts, she said. Based VW’s cost and timing analysis, it decided to start with the paint shop first, Ms. Bratina said.

Ms. Merritt said Walbridge would “love to do it all,” referring to the rest of the 1.9 million-square-foot facility.