Volkswagen: Chattanooga plant leads Mexico for SUV

Volkswagen: Chattanooga plant leads Mexico for SUV

September 18th, 2013 by Mike Pare in Business Around the Region

A factory worker performs diagnostics on a Passat after it was taken through a dyanometer in the assembly section of the Volkswagen Plant in Chattanooga. A VW official said Tuesday that Chattanooga is the lead candidate to build a new SUV.

Photo by Doug Strickland/Times Free Press.

POLL: Should VW unionize in Chattanooga?

Volkswagen's Chattanooga assembly plant is in the lead to build a new sport utility vehicle, a company official said Tuesday.

Marc Trahan, executive vice president of quality for Volkswagen in the United States, said at an Automotive Press Association luncheon in Detroit that VW will decide by the end of the year where to build the SUV and Chattanooga is the front-runner.

Trahan said the decision will be based on cost.

"Right now I'd have to say Chattanooga's in the lead," over factories in Mexico, he said.

The comments are in line with a report by the Times Free Press earlier this summer. Aaron Bragman, Detroit bureau chief for Cars.com, said then that VW probably will build the SUV in Chattanooga if the company OKs production.

VW has revealed a pair of potential new SUVs, a compact and a midsize.

A five-seat SUV concept dubbed the CrossBlue Coupe was shown off at a recent key auto show in China. It's a cousin to the seven-seat CrossBlue unveiled in Detroit last January. VW doesn't have a three-row SUV in the U.S. market.

Karl Brauer, senior industry analyst for Kelley Blue Book, said VW currently offers two aging SUVs in the U.S. -- the Tiguan and the Touareg.

"They're not competing with the more updated ones out there," he said. "They could use another one. Most companies have three or more. VW is behind the curve."

Brauer said the SUV segment is an active and growing one in the U.S. He said SUVs are achieving better fuel economy and buyers like their flexibility and image.

Trahan wouldn't discuss efforts by the United Auto Workers to organize workers at the Chattanooga plant, or say whether those efforts are part of the discussion about where to build the new SUV. The UAW said last week that a majority of workers in Chattanooga have signed cards seeking union representation.

Brauer said that if the decision about the union at the plant isn't resolved, it could come into play in terms of where vehicles are built by VW.

"If the plant decides to go union, that could have an impact on where VW builds the next SUV," he said.

The Chattanooga plant currently has two daily 10-hour shifts of workers making the Passat sedan four days a week. Trahan said if the SUV doesn't go there, something else will.

"It's not a question of if but when," he said.

Trahan said the SUV will likely go on sale in 2016 or 2017.

The Associated Press contributed to this story.

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