Volkswagen Chattanooga, going all-in on SUV production and readying for an electric vehicle offensive, will cease assembly of the Passat sedan in Chattanooga this winter.
Passat production at the plant has hit more than 775,000 vehicles to date, having started more than a decade ago when the factory opened, according to the German automaker.
VW will focus on continuing to build its popular Atlas SUVs and its new electric ID.4 SUV next year, according to the company.
"With the Atlas and Atlas Cross Sport in high demand and the North American production launch of the all-electric ID.4 SUV next year, our future in Chattanooga looks brighter than ever," said Scott Keogh, president and CEO of Volkswagen Group of America.
Tom du Plessis, Volkswagen Chattanooga's chief executive, said the sales trend is firmly in favor of SUV models, as indicated by the success of the Atlas and Atlas Cross Sport.
"While we are and will always be proud of the Passat, we look forward to the continued success of the Atlas family and a bright future with electric vehicle production," he said. "In the interim, the Passat remains on sale and continues to be a great value."
Over the decade, sales of all sedans have been hurt by a shift of motorists to SUVs and trucks.
In the first half of this year, U.S. Passat sales were 11,367, up 13% from the pandemic-stricken first part of 2020.
Still, Passat sales pale in comparison to the 69,897 Atlas SUVs sold in the first half of 2021. Atlas sales are up 120% in the first part of 2021 compared to the same period a year ago.
Karl Brauer, executive analyst at the auto research firm iSeeCars.com, said the Chattanooga plant was set up on the promise of the Passat.
"It was such an important car for the time," he said.
Sales hit more than 117,000 in its first full year in 2012. But after several successful years, the Passat's U.S. sales began to slip.
The company quickly changed course to producing more SUVs and its fortunes rose again, Brauer said.
"This is the final validation where the brand should go and has to go to be successful in this market," he said.
U.S. Passat Sales
* 2020 - 22,964* 2019 - 14,123* 2018 - 41,401* 2017 - 60,722* 2016 - 73,002* 2015 - 78,207* 2014 - 96,649* 2013 - 109,652* 2012 - 117,023Source: Volkswagen of America
The Limited Edition 2022 Passat will be available in four color combinations, with the number of each paying homage to an aspect of the vehicle's past, according to VW.
Aurora Red Metallic models with Titan Black interior will number 411 units, representing the original vehicle production code. Racing Green Metallic models with Mauro Brown interior will number 423 for the Chattanooga area code.
Pure White models with Mauro Brown interior will number 524 units, signifying the opening date of the Chattanooga plant on May 24, 2011.
To round out the limited run, 615 Platinum Grey Metallic models with Titan Black interior will be produced - signifying six generations of imported Passats, one assembled in Chattanooga and five decades of U.S. sales.
Employment at the plant, which now numbers more than 4,000, will not be affected by the end of Passat production because of the demand for the Atlas and the ramp-up of ID.4 assembly, according to VW.
In fact hiring will scale up as production of the ID.4 gets closer in 2022, du Plessis has said. VW has invested $800 million in the factory to prep for building EVs.
Brauer said he expects more battery-powered models will come from Chattanooga, possibly an even larger SUV than the ID.4.
"It's inevitable we'll see more electric vehicles produced at the plant," he said.
Brauer said VW has successfully pivoted as a brand from a company that for most of its history in the U.S. was an automaker of compact cars, such as the Beetle, to one known for its SUVs.
He noted the profit margin is greater on larger vehicles and "there's no arguing with where the value is for the company."
Pricing for the 2022 Passat Limited Edition starts at $30,295 MSRP with a destination cost of $995. The Aurora Red Metallic exterior color option is an additional $395.
Inside, Limited Edition models will bear unique seat tags featuring "1 of 1973" on one side and "Chattanooga 2011" on the other, according to VW. A special mat adorns the cupholders, featuring aerial maps of the city and an aerial line drawing of the Chattanooga factory, the company said.
The first versions of the Passat family sedans and wagons from Volkswagen for U.S. customers were launched in 1974 under the Dasher name.
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.