Volkswagen Considering Building A Second Factory In The U.S.

Volkswagen wants to build more of its vehicles in America for the US market. And while that could mean expanding its existing factory, the German automaker is also considering adding another plant in the United States.

“We set up the plant in Chattanooga always with the idea to be able to grow it, to mirror it,” VW Group CEO Herbert Diess told Automotive News.

“The plant is still too small, and we are considering different options; it might be electric cars, it might be a different derivative of the Atlas — it’s still open.”

The company has been building models like the Atlas and the Passat at its plant in Tennessee since 2011. It also has another factory across the border in Puebla, Mexico, which is its largest outside of Germany and produces models like the Jetta, Golf, Beetle, and Tiguan. But those two sites apparently aren’t enough.

Just where VW might locate its next facility, should it decide to build one, is anyone’s guess. But it would, in all likelihood, place it in a right-to-work state (free of union obligations) in the South. Mercedes operates its plants in Alabama as well as South Carolina, where BMW also has its factory.

VW is also embarking on a new partnership with Ford, which will yield new small commercial vehicles for the European market, but may also lead to joint development of a pickup to replace the Ranger and Amarok, as well as Ford’s use of VW’s new electric vehicle platform. But it won’t lead to a merger, or even an exchange of shares.

“I wouldn’t agree with Marchionne that the right step forward is to have the biggest company,” Diess said in reference to the late Fiat Chrysler CEO, “because in such kind of uncertainty, you have to be profitable, you have to be fast, and the new scales are different from the old scales. It doesn’t help you if you have as many as possible gearboxes, etc. … It doesn’t help you.”