With VW expecting U.S. sales to power up by 20 percent in 2011, dealers continue to grow operations with Chattanooga's Village Volkswagen planning a $1 million expansion.
"This will get us prepared for the decade," said Dale Smith, the dealership's general manager.
Smith said Village Volkswagen plans to double its parts and service operation and provide more parking at its International Drive location, which opened just 2 1/2 years ago.
He said the project will increase the number of service bays from 16 to 32. Smith said the dealership has property behind it on which to grow.
Many VW dealerships have expanded or are doing so to handle sales growth due to customer interest and aggressive goals set by the German automaker, officials say.
The new Chattanooga-made Passat, set to hit dealerships in the third quarter, and the redesigned Jetta are expected to lead VW sales.
Jonathan Browning, VW Group of America's chief executive, said 61 dealers have invested more than $155 million in new or upgraded facilities over the past few years to accommodate larger volumes.
He told the Chicago Economic Club this week the company expects VW sales this year to jump about 20 percent over 2010. The German automaker is counting on big investments by its dealers and the new Chattanooga assembly plant to maintain VW's sales-growth momentum in the United States.
VW sales in the U.S. rose 20 percent last year, nearly double the industry average, from 2009 to 256,830 vehicles.
Smith said sales and new products are helping drive the Village Volkswagen expansion.
Last year, Village sold 510 new vehicles, he said. This year, VW expects to ship the dealership up to 1,000, Smith said.
"It's a great time to be a VW dealer," he said.
Browning said VW's car lineup is designed for American drivers and the company anticipates rapid increases in sales to continue in coming years.
"Our dealers across the country are preparing aggressively for these higher volumes," he said.
Browning said many dealers have been "urging us for years to make a total commitment to this market," he said. "Now that we have done so, they are dealing with the challenge of a significant increase in customers and sales."
* 580 -- VW dealers countrywide
* 800,000 -- VW brand sales goal by 2018
* 200,000 -- Audi sales goal by 2018
Contact Mike Pare at email@example.com or 423-757-6318.