Erich Merkle

Volkwagen officials are considering production of a sport utility vehicle at its Chattanooga plant in addition to a new midsize sedan.

"It would be based on the same platform" as the car, said industry consultant Erich Merkle, president of autoeconomy.com.

He said it's likely such an SUV would go head to head against competitors such as the Honda Pilot and Toyota Highlander.

The reason for building an SUV in Chattanooga would be to get "the most bang for your buck" from American production, and that the segment is one expected to grow, the analyst said.

"For the operation in Chattanooga to be successful, you go where the money is at," said Mr. Merkle. "You follow the honey."

The company plans to start production at its Chattanooga plant in early 2011, ramping up to 150,000 units a year.

The automaker has said it could make up to another 150,000 vehicles for a total of 300,000 a year.

April Wortham, a VW spokeswoman, said a top VW product strategist indicated Wednesday plans include an SUV that would be produced with "high local content."

Ms. Wortham said company officials advised there's no decision at this time if it will be produced in Chattanooga.

Earlier this month, Stefan Jacoby, VW Group of America's chief executive, told the Detroit News in an question-and-answer interview that it's investigating a second product for Chattanooga -- possibly a compact SUV.

The midsize sedan VW has announced it will make in Chattanooga is to compete with vehicles such as Toyota Camry, Honda Accord and Chevolet Malibu.

Mr. Merkle said the small- to midsize SUV would be a crossover -- built on a car's frame rather than a truck's.

"It's easy to get in and out of," he said.

Mr. Merkle said that as baby boomers get older, crossovers appeal to them over the larger SUVs such as the Chevolet Suburban or Ford Explorer, which are based on a truck frame.

Smaller crossovers don't have the towing capacity of a truck-based SUV and may not be as agile off road, the consultant said. But many drivers don't need those features, he said.

Mr. Merkle said the existing SUV lineup from VW doesn't fit the bill for volume selling, noting the Touareg is too expensive.

In addition, VW's SUVs are imported into the U.S. from Germany, making them more costly to American customers.