Chattanooga eyed for future Volkswagen CC sedan assembly

Chattanooga eyed for future Volkswagen CC sedan assembly

May 15th, 2014 by Mike Pare in Business Around the Region

The Enterprise South industrial park hosts Volkswagen and Amazon facilities.

Photo by Dan Henry/Times Free Press.

Volkswagen of America's chief executive says the German automaker is considering building the next generation CC sedan at its Chattanooga production plant.

CEO Michael Horn told industry magazine Motor Trend that while a decision could be a while off, the carmaker could outfit the Chattanooga plant or assemble the CC at its operations in Mexico.

The expense of importing the European-made CC along with a high Euro-dollar exchange rate were among reasons to bring the CC production to America.

The CC is mechanically similar to the Chattanooga-made Passat. It's often viewed as a sleeker-looking version of the midsize sedan.

Horn said that VW is studying two versions of the CC, including a fastback body style.

Jesse Toprak, Cars.com's chief analyst, said VW buyers in the U.S. are often a younger demographic than typical purchasers, and that the "20- or 30-somethings are not looking to be like one of the herd."

"They want to stand out a little bit," he said.

Toprak said some of VW's existing product in the U.S. is "not anything special" in regard to the way the vehicles look.

"They're blank," he said. "They're like background noise."

CC sales in the U.S. so far are a little more than 10 percent of the Passat. Through April, VW has sold 3,920 CC vehicles this year, which is down a whopping 31.7 percent from the same period a year ago.

The Chattanooga plant is on track to sell a little more than 100,000 Passats in 2014, well under the 170,000 production capacity at the factory.

Already, Chattanooga is considered the front-runner to make a new sport utility sedan designed for the U.S. that the company wants in showrooms in 2016. The local factory is competing with VW operations in Mexico to make the SUV, which is seen as a foundation to the automaker's growth in North America.

VW's U.S. sales through April were 118,154, down 10.4 percent from a year ago.

Contact Mike Pare at times freepress.com or 423-757-6318.