Volkswagen plans to build a midsize sport-utility vehicle that will accommodate up to seven passengers in its Chattanooga, Tennessee factory.
In an announcement made earlier this week, the German automaker hopes that this vehicle will help to turn around the decline in sales that Volkswagen has seen over the past two years in the U.S. Market.
Volkswagen automaker will invest $600 million USD into expanding their existing factory that currently builds the Volkswagen Passat. The factory will be expanded by 538,000 feet and a new research centre will be set up to house 200 engineers. The aim of the research centre is to quickly absorb customer feedback and make changes into existing models. The expansion will add 2,000 jobs to the factory.
The SUV will be based on the CrossBlue concept that was revealed in Detroit in 2013. It will accommodate up to seven passengers across three seating rows. This vehicle will give Volkswagen an entry point into a very important segment of the U.S. market where it currently does not exist.
Volkswagen sales fell almost 7 per cent last year and are down more than 13 per cent so far this year. The decrease in sales is partly because VW doesn’t have representation in one of the largest U.S. segments of the car market, which are vehicles that can accommodate seven passengers for large families.
The seven-passenger three-row SUV sales have almost doubled in the U.S. to 1.4 million units per year since 2009.
