VW official: New SUV to be produced in Chattanooga is 'a stunner' (videos)

VW official: New SUV to be produced in Chattanooga is 'a stunner' (videos)

July 16th, 2014 by Mike Pare in Business Around the Region

The CrossBlue exterior.

The CrossBlue exterior.

Photo by Contributed Photo /Times Free Press.

VW CrossBlue interior is shown at the 2103 North American International Auto Show.

VW CrossBlue interior is shown at the 2103...

Photo by Contributed Photo /Times Free Press.

Volkswagen Group of America chief Michael Horn on Tuesday said that the new sport utility vehicle the company will produce at its Chattanooga plant is "a stunner."

"You can be sure it will be top of the line," Horn said at the Hunter Museum where officials talked about the company creating 2,000 more jobs at the factory as it aims to start producing the SUV by late 2016.

Horn said that the concept vehicle it showed off at the North American International Auto Show in January 2013 has been refined. The new vehicle will have "a great design, be tops in safety, quality" and possess the technology Americans want, he said.

"It's a real U.S. midsize SUV, developed for the American market," he said.

The German automaker has seen U.S. sales double since 2008 as it introduced a new made-for-America Passat produced at the Chattanooga assembly plant. But, VW sales have fallen by 13 percent so far this year as the company's offerings in the key SUV market are aging and not seen as meeting the needs of American motorists.

Thomas Ulbrich, a member of the Volkswagen Passenger Cars board of management for production and logistics, said the expansion starts "the second phase" of the company's U.S. campaign to boost sales.

"Our objective is clear," he said, noting the company wants to about double sales and hit 800,000 a year by 2018 for the VW brand.

Ulbrich cited the new research and development center VW will create in Chattanooga, employing 200 engineers. He said the center will strengthen the company's development in North America.

"Also, it will ensure we keep our eye more closely on the U.S. market and the wishes of American drivers in the future," Ulbrich said.

Horn said VW's dealers want the seven-seat SUV.

"They want to grow. They want to be profitable," he said. "That's how we add to the success story of the Passat."

Scott Vazin, executive vice president of VW group communications in the U.S., said the company aims to sell a "six digit" figure annually of the SUVs when it hits showrooms as a 2017 model.

One of the vehicle's engines will be a diesel power plant, he said, citing the popularity of the diesel Passat in the U.S.

"That's a significant one for us," Vazin said, adding that it is to be "class leading" in fuel economy.

Pricing will be announced closer to production, he said.

Michael Horn, President/CEO of VW Group of America, hugs Tennessee U.S. Sen. Bob Corker at the Hunter Museum of American Art on Tuesday.

Michael Horn, President/CEO of VW Group of America,...

Photo by Dan Henry /Times Free Press.

The $600 million to be spent at the Chattanooga plant will equip it with the company's innovative, money-saving modular transverse toolkit. That will enable VW to design models ranging from a three-door hatchback to an SUV virtually sharing the same front axle, pedal box and engine positioning despite varying wheelbase and external dimensions.

The new assembly line is seen as enabling the plant to attract other models as well.

Ron Harr, the Chattanooga Area Chamber of Commerce's CEO, cited the plant's workforce, which Chattanooga State Community College helps to train through the Volkswagen Academy.

He said the workers at the plant, which had never built a car, came together and produced a Motor Trend Car of the Year with the Passat.

Jim Catanzaro, Chattanooga State's president, said it will do more more hiring and learn up as well as it prepares for production.

"It's been a wonderful six-year relationship," he said.

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