Draexlmaier, a big German auto parts company, is the latest business to set up shop in Volkswagen's supplier park in Chattanooga.
The company will sequence wire harnesses for installation in the new midsize sedan VW will start producing at its assembly plant early next year, said Erik Reiter, chief executive of Draexlmaier of North America.
He said the company will initially employ up to 25 workers with hopes of doubling that number in four to five years.
The addition of the company to the seven already in the supplier park puts the projected number of jobs there at about 525.
"It's a new chapter in automotive history," Reiter said about the VW plant that's slated to make about 150,000 vehicles annually.
Trevor Hamilton, the Chattanooga Area Chamber of Commerce's vice president of economic development, said Draexlmaier's leasing space in the supplier park next to VW's plant is further indication of the city's opportunities.
"We're very pleased it worked out for them and us," Hamilton said. "As volumes increase and the plant grows in Chattanooga, that bodes well."
Guenther Scherelis, general manager of communications for VW's Chattanooga operation, said Draexlmaier plans to start operations later this month.
Reiter said the wire harnesses will be made in its Puebla, Mexico, plant and shipped to Chattanooga. Draexlmaier will put the wire harnesses in the proper order, he said. Citing the complexity of the wire harnesses, Reiter said Draexlmaier will be the only company in the supplier park to handle its own sequencing.
"It makes sense we do it at the Chattanooga plant," he said.
Concerning potential expansion, Reiter said that would come if VW adds a second vehicle for production.
Hamilton said he sees chances to grow the auto sector in Chattanooga. He said he recently attended an auto trade show in Wolfsburg, Germany, and had 34 one-on-one appointments.
Hamilton said there is room to construct more buildings in the supplier park. VW's $1 billion plant is slated to employ between 2,000 and 2,500 workers when it's fully ramped up.