Assembly of VW Passat, CrossBlue SUV variants eyed for Chattanooga plant

Chattanooga's Volkswagen plant

This Volkswagen image shows the midsize SUV VW plans to build for the American market.

The Volkswagen brand's U.S. sales rose in November for just the second month this year, and an industry publication says the automaker is looking at bringing new variants of the Passat and planned CrossBlue SUV to the market.

The moves are aimed at bolstering sales, which have flagged in the U.S. for the past couple of years, and VW could assemble one or more of the vehicles in Chattanooga, according to Car Magazine.

"American car buyers love sedans and SUVs. Guess what VW does not have enough of?" the magazine said.

Volkswagen of America reported Tuesday that sales rose 3.2 percent last month over a year ago, though the Chattanooga-made Passat sedan posted a 21.5 percent drop in November.

For the year, VW's overall sales of 332,911 are off 10.9 percent. Passat sales of 88,392 are down 12 percent for 2014.

The magazine said VW has developed "Project C1" -- known inside the company as the Passat Plus and Passat Sports Sedan. The idea of the variants is inspired by Toyota with its closely related Camry and Avalon sedans, it said.

They would be new Passats designed specifically for the U.S., and one possible version would use the Audi A6 as a "donor car," the magazine said. The car would roll off an Audi plant assembly line if built, it said.

But another version would use VW's new global assembly platform, the publication said. That platform, in which there's lots of flexibility in assembly and parts sharing among models, is to be installed in Chattanooga with the $900 million plant expansion that's underway.

Use of the new platform would allow for the alternative Passat to be assembled in Tennessee, the magazine said.

In addition, the C1 project could offer another Passat as "a sports cruiser" that's neither a traditional wagon nor a five-door coupe but a sleek crossover, Car Magazine said.

Also under discussion but not approved for North America is a coupe version of the CrossBlue midsize SUV, it said, adding that that vehicle could appear as a concept at next month's Detroit auto show.

Karl Bauer, senior analyst for Kelley Blue Book, said he doesn't expect VW sales in the U.S. to be "in good shape" until the CrossBlue SUV hits the market in late 2016.

"That SUV would be so popular in the U.S. right now," he said.

With lower gas prices, SUV sales are surging. Smaller, compact SUVs are even selling better than the midsize versions in the U.S.

"VW has two old SUVs," Bauer said about the current Tiguan and Touareg.

Meanwhile, VW plans to show off a refreshed Passat next year that's expected to give the vehicle's sales a boost. For example, sales of the newly refreshed Jetta compact last month were up 31.8 percent over a year ago. The current Passat hit dealer showrooms in 2011.

Jesse Toprak, chief analyst for Cars.com, said VW's midsize and small car offerings are in two of the most highly contested vehicle segments in America. The Passat sits in the most crowded segment of all, he said, competing against such heavy sellers as the Toyota Camry, Honda Accord, Ford Fusion, Chevy Malibu and Hyundai Sonata, among others.

Toprak also said VW is at "a major competitive disadvantage" due to its aging lineup of SUVs.

One key part of the Chattanooga plant expansion is that about 200 engineering-type workers are to be hired for a new North American development and planning center. That will be aimed at strengthening VW's development and expertise in the region in terms of what American drivers want, officials have said.

VW is ramping up the plant expansion to build the new SUV based off the CrossBlue concept that was revealed at the Detroit auto show nearly two years ago. Production of the SUV is to start in late 2016, according to VW.

Contact staff writer Mike Pare at mpare@timesfreepress.com or 423-757-6318.