VW set to lay out plans for another Chattanooga-built SUV

A Volkswagen employee wipes down the sides of cars as they pass her on the assembly line at the Volkswagen Assembly Plant Thursday, Aug. 31, 2017, in Chattanooga, Tenn. In April, VW said there's room in the market for another SUV, a five-seater, that could be a derivative of the Atlas.

As Volkswagen tries to boost its market share in America, the automaker appears ready to push ahead with another foray in its so-called SUV offensive.

The German carmaker today is slated to lay out plans for another Chattanooga-built sport utility vehicle aimed at helping deliver more of the kinds of vehicles U.S. motorists are buying.

Volkswagen plans to spend $340 million to bring the new SUV to the market.

photo Hinrich Woebcken

The five-seat SUV is seen as complementing the seven-seat Atlas that has helped bolster VW sales since it came on the market last spring. The new product will help beef up production at the plant where 3,450 workers assemble the Atlas and Passat midsize sedan.

VW officials declined to comment ahead of a the afternoon announcement at the plant that's slated to draw Tennessee Gov. Bill Haslam and Hinrich J. Woebcken, president and chief executive of Volkswagen Group of America, along with Chattanooga Mayor Andy Berke and Hamilton County Mayor Jim Coppinger.

However, VW officials in America and Germany have for months talked about another SUV for the Chattanooga factory.

Herbert Diess, who heads the VW brand worldwide, said at the plant late last year that it was "highly likely" there would be a five-seat derivative of the Atlas to come to the market.

Next year, VW plans to launch an all-new Chattanooga-made Passat sedan. It would be the first full remake of that vehicle since VW began U.S. production of the car in 2011 as it tries to power up its sales.

Also, it was reported last week that an electric vehicle plant would be set up in Chattanooga by 2020. One of nine worldwide to be ready by the turn of the decade, the electric vehicle plants would be built inside existing factories.

photo Tennessee Gov. Bill Haslam

Karl Brauer, executive publisher of Kelley Blue Book, said that prior to the diesel emission issue, the company had momentum in the American marketplace, even though it was light on SUVs at the time.

Production of more SUVs is more in line with where consumer demand has gone, Brauer said.

"At the end of the day, it makes really appealing vehicles," he said.

The moves come as the Chattanooga VW plant prepares to idle production for two weeks late this month and early next. The Chattanooga plant will have nonproduction periods on March 26-29 and April 2-5.

The plant will remain open the first week of nonproduction and the time will be used for training, retooling to boost Atlas product and prepare for new developments.

Volkswagen of America sales overall were up 5.7 percent the first two months of the year, largely due to SUVs, figures show.

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