Auto analysts hint engines at VW site

Auto analysts hint engines at VW site

April 9th, 2010 by Mike Pare in Volkswagen

An auto industry analyst has suggested there's a chance engines for Volkswagen's new midsize sedan could be made locally.

But a VW official dismissed the idea and said the company is focused on just getting the assembly plant up and running in about a year.

"That's speculation," said Guenther Scherelis, general manager of communication for VW's Chattanooga operations.

Peter Schmidt, editor of European newsletter Automotive Industry Data, said in a column published last week in the Detroit News that Volkswagen's auto sales targets in the U.S. are "definitely achievable."

In the column written by Neil Winton of Autos Insider, Mr. Schmidt said VW's problem in the past is that it didn't make cars in the U.S. that could compete with the Toyota Camry and Honda Accord.

"The old European Passat couldn't compete on costs; but now with the new plant (in Tennessee) and the new medium-size sedan being made there, VW should be able to compete with Accord and Camry. And I think there's a chance the engines might be made there, too," Mr. Schmidt was quoted as saying.

VW's products "will be competitive in the U.S. and with their image they can achieve the volumes they're gunning for, and profitability too," he said.

Mr. Schmidt could not be reached Thursday for comment.

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's chief executive, said while officials would like to see any expansion of VW's manufacturing capacity, they've had no discussions that an engine plant is on the horizon.

"VW has said 'We're focused on getting the primary manufacturing set up,'" he said.

Mr. Scherelis said VW is aiming to get the $1 billion Chattanooga plant ready to assemble cars.

"We're working to get the 150,000 cars out at the factory," he said.