published Sunday, January 10th, 2010

VW puts city on automotive stage today

  • photo
    Contributed photo VW‚s plant under construction in Chattanooga is to begin production system trials around midyear.

Volkswagen is powering up efforts to show the world it's serious about becoming a major player in the United States with its Chattanooga plant serving as the cornerstone of its growth plan.

Today at its Virginia U.S. headquarters, top officials of the German company will tell more than 100 automotive journalists, most of whom are from Europe and China, that it's full speed ahead in making cars again in America after two decades.

"We're sticking to the plan and making progress," Volks-wagen Group of America's Steve Keyes said about the $1 billion plant set to open in little more than a year.

A number of journalists have been skeptical about the automaker's plan to make up ground in the United States after driving away from producing cars here in 1988 when it closed a Pennsylvania plant, he said.

"We need to change that perception," Mr. Keyes said, noting today's event is part of a ramp up of marketing initiatives for its U.S. strategy dubbed "Mach 18."

VW aims to more than triple sales in the United States to 1 million vehicles annually by 2018.

The two-day stopover by journalists at VW's headquarters outside Washington, D.C., in Herndon, Va., will include briefings with the carmaker's key officials in the country.

Frank Fischer, chief executive of VW's Chattanooga operations, is expected to lay out what's in store for the plant's future.

Stefan Jacoby, VW Group of America's chief executive, will talk about the company's U.S. blueprint, 2009 highlights and the outlook for 2010.

plant 'on track'

Guenther Scherelis, general manager of communications for the Chattanooga operations, said the journalists will continue to Detroit for the start Monday of the North American International Auto Show.

Plans are to make clear to the group that VW is committed to boosting market share in the U.S., he said.

"We're serious about our engagement here and looking forward to being an American producer," he said.

Mr. Keyes said VW is "hitting all the milestones" in the construction of the Chattanooga production facility that will make a midsize sedan new to North America.

VW will make a new compact sedan which it will unveil in late summer. That vehicle is to be made in VW's Mexico plant, he said.

In addition, VW will show the foreign journalists the new Up! Lite, a three-door, four-seat version of a small car powered by a hybrid powertrain.


Last week, VW of America reported December 2009 sales which were 16 percent above a year earlier.

While December marked VW's sixth consecutive sales month above the prior year, it sold 4.3 percent fewer cars in the U.S. last year than in 2008. Still, VW competitors such as Toyota and General Motors were off by double-digit percentages in the period, figures show.

Mr. Keyes said VW is benefiting from a lot of new product that was introduced in 2008. Among those vehicles were so-called clean diesel- powered autos which VW officials said have taken hold in the marketplace.

"People have embraced the new technology," Mr. Keyes said. "The initial buyers were die-hard diesel people. But we've seen all-new customers we never saw in the showroom before."

Volkswagen's clean diesel models accounted for over 20 percent of the brand's total December sales with 4,378 units, according to the carmaker.

VW officials have said up to 30 percent of the cars made in Chattanooga could hold clean-diesel technology.

VW timeline

* January -- Winner to be announced of contest designing key foot bridge connecting Chattanooga factory and parking lot; workers start occupying training center

* First quarter 2010 -- Hiring of equipment maintenance workers ramps up

* Mid 2010 -- Hiring of production employees accelerates; production system trials begin

* Early 2011 -- Start of production of new midsize sedan

Source: Volkswagen

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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