Audi, Volkswagen’s luxury brand, plans to invest $4 billion in Georgia to build its first U.S. plant after it reportedly considered building a “twin plant” in Chattanooga.
Volkswagen has room to expand at its Chattanooga plant, the only U.S. production facility for the German brand. After President Donald Trump and Audi CEO Gernot Dollner announced the Georgia plant at a rally in Perry, Georgia, on Saturday ahead of midterm elections, the odds of Audi production in Chattanooga seemed small. The Chattanooga plant produces the VW Atlas and Atlas Cross Sport SUVs.
“We are excited about the future of Volkswagen in Chattanooga and are working to support them with the new Atlas and hope to work with the company on expansion opportunities in the future,” Charles Wood, CEO of the Chattanooga Area Chamber of Commerce, said in an emailed statement. “We also anticipate that Audi’s U.S. location has the potential to bolster the automotive supply chain in the greater Chattanooga region.”
Hamilton County Mayor Weston Wamp said he never spoke with Audi officials about a proposal for Chattanooga. The Audi plant near Macon would have an annual production capacity of up to 200,000 vehicles and create around 4,500 jobs, Audi said in its announcement.
The plant would be built at the 1,500-acre Middle Georgia Megasite in Peach County beginning in 2027. The Volkswagen site at Enterprise South Industrial Park in Chattanooga covers around 1,400 acres.
“Certainly a deal of this magnitude is something that we would have heard about if we were being considered,” Wamp said in a phone call. “Just looking at the sheer scope and scale of this investment, both from a job standpoint and an acreage standpoint, I don’t think we would have been a good fit.”
The Tennessee Department of Economic and Community Development declined to comment on whether the state competed for the Audi plant.
(READ MORE: As Volkswagen shrinks to contain crisis, Chattanooga’s position strengthens)
The Georgia announcement comes as the German-based Volkswagen Group, the parent company of the Volkswagen brand and Audi, plans a major downsizing. The Volkswagen board approved a plan that includes cutting as many as 100,000 jobs and closing four plants in Germany.
North America is an important market for Volkswagen’s growth as tariffs raise the cost of importing vehicles. The Audi plant in Georgia would begin producing luxury SUVs for the market in the early 2030s, Dollner said.
“We have much greater ambitions for Audi in America,” Dollner said in the announcement. “The United States is one of the world’s most important premium markets, and we have not yet realized our full potential. We are determined to change that.”
Audi evaluated more than 70 sites during a three-year project, Dollner told media outlets on Sunday. Georgia provides a skilled workforce, a network of automotive suppliers, a strong supply chain and a ready site with the Middle Georgia Mega Site in Fort Valley, according to Audi.
Last year, German business newspaper Handelsblatt reported Audi preferred building alongside the Chattanooga plant for U.S. production, according to anonymous sources.
Brent Hinson, vice president of finance at the Chattanooga plant, said in an interview in September that the plant has offered to collaborate with Audi.
“We definitely welcome Audi, but our first intention is really to focus on what we can control, and that’s our production of this new Atlas,” Hinson said.
Volkswagen launched the 2027 models of the Atlas and Atlas Cross Sport in September and plans to produce 160,000 cars next year in Chattanooga.
The automaker ended U.S. production of the all-electric ID.4 SUV, leaving around one-fifth of its production floor space in Chattanooga idle. Several outlets reported Volkswagen is exploring a pickup truck to build in Chattanooga.
“Chattanooga remains central to our U.S. strategy,” Volkswagen spokesperson Michael Lowder said in an email on Monday. “Our immediate focus is the all-new Atlas, while we continue to explore pathways to bring potential new products to the plant that meet U.S. consumer needs and align with our focus on high-volume segments.”
Contact business reporter Daniel Dassow at ddassow@timesfreepress.com or 423-757-6318.
