Volkswagen could save nearly $2 million a year in tariffs

Volkswagen's Chattanooga plant has won federal foreign trade zone status, which is expected to save it up to $1.9 million a year in tariffs and help it compete for potential expansion projects.

In its application for the duty-free zone in Chattanooga, VW said that 86 percent of the goods used to make the car are purchased in North America, and that it plans to export up to 20 percent of its Chattanooga-made vehicles.

Guenther Scherelis, VW's general manager of communications in Chattanooga, said approval of the foreign trade zone "provides us with a level playing field" with other foreign and domestic automakers which also have trade zone benefits.

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president of marketing, said the trade zone designation will make the plant more competitive.