Autoblog

Volkswagen announced this morning that it would build a manufacturing plant in Chattanooga, Tenn. where it will build a vehicle specifically for the North American market. The plant will employ 2,000 workers from the tri-state area and is expected to invest $1 billion in the local economy.

The plant is an integral part of Volkswagen's plan for expansion in the N.A. market, with sales expected to crest 800,000 units by 2018. The 1,350-acre site will produce 150,000 vehicles annually – specifically a midsize sedan – in 2011.

Make the jump for the full press release.

Following-up on last week's announcement that Volkswagen was looking at Alabama for a new manufacturing facility, the German automaker's management board is expected to make their final recommendation today. Following that announcement, Volkswagen's supervisory board, headed by former VW group CEO Ferdinand Piech, will make its decision by tomorrow. Whether Huntsville, Alabama, or second-choice Chattanooga, Tennessee, gets the nod, the move is key for Volkswagen as they attempt to increase sales in the United States with more targeted, and lower priced, vehicles. In addition to the Volkswagen Jetta (itself being redesigned to better compete with the Honda Civic) the new facility will produce an all-new Passat-sized sedan with a base price of about $20,000. Larger, in order to compete with the Toyota Camry, the new sedan would undercut the current Volkswagen Passat's pricing by about $5,000--a significant margin. The plant would open in late 2010 with an annual production capacity of nearly 250,000 vehicles.

[Source: Automotive News, subs. req'd]

When the second quarter of 2010 rolls along, 1,400 workers at General Motor's Windsor transmission factory will be out of work. The plant, which currently produces four-speed gearboxes for GM, will be phased out at the turn of the decade, with no plans to retool the facility to produce any other components. GM's Canada President, Arturo Elias, made it clear in the announcement that the decision was not a "reflection on our excellent Windsor workforce," but instead is due to a lack of available, "replacement products in the relevant timeframe for this location." Fortunately or unfortunately, today's announcement of the plant's closing takes place as the General negotiates a new contract with the Canadian Auto Workers (CAW) union.

[Source: Detroit News]

Richard Cortez, the Mayor of McAllen, Texas, called a news conference earlier this week to announce that city officials were in talks with an unnamed automaker to build a new manufacturing facility in the Rio Grande Valley. Interestingly enough, he gave few other details as he was worried about upsetting the "customer" as they have asked for silence on the project. Not to surprise anyone, but all signs are pointing at Hyundai Motor Company.

The Mayor has good reason to keep his mouth shut. Just two years ago, the South Korean automaker was in talks with local area officials about a similar project. Those plans fell through when early media leaks identified Hyundai as the potential automaker, and they chose West Point, Georgia, instead. (You are probably asking yourself, as we are, why would the Mayor call a news conference about this in the first place...)

Regardless, analysts say the Rio Grande Valley would be a good fit for Hyundai. The location is close to Mexico, so components could be assembled on the other side of the border and shipped to the United States for final assembly. If Hyundai chooses Texas for their new plant it would be their fourth facility in the United States following plants in Alabama, Georgia, and California. That is, if the Mayor can keep a secret. Thanks for the tip iSpec!

[Source: The Monitor]

Volkswagen has already announced its intentions to build a factory in the U.S., narrowing down the possible sites to Alabama, Michigan and Tennessee. Now, in advance of a shareholder meeting in Germany, Audi CEO Rupert Stadler is reportedly saying that Audi is considering a U.S. plant, as well. The move on both automakers' parts is an attempt to capitalize on the weak U.S. dollar, the stronger euro and the fact that material costs are on the rise and a U.S. plant could mitigate some of those expenses. Additionally, both VW and Audi have made it clear that in order to achieve their lofty sales goals – one million units a year by 2018 for V-Dub and Audi's campaign to become the numero uno luxury carmaker – ramping up production capacity in the U.S. where many of those sales will be made is instrumental to their mutual success.

[Source: Autoweek]

Click above for high-res gallery of the 2007 Toyota Tundra Limited

As of today, production of the Tundra full-size pickup is split between Toyota's facility in Princeton, Indiana, and the automaker's brand new San Antonio plant in Texas. According to a Wall Street Journal report, Toyota is considering moving all production of the Tundra to just the Texas plant. Just over two weeks ago, Toyota announced it was slowing production on the Tundra (and Sequoia) due to lagging sales. The move to consolidate all Tundra manufacturing in one location may be seen as a sign Toyota only expects to sell 200,000 full-size units or less this year, as that number represents the production capacity of the Texas facility. You may remember that Toyota boldly claimed it would sell 200,000 units of the Tundra in 2007, the newly redesigned truck's first year of sales. It missed that target, but not by much with 196,555 units sold. Toyota hasn't officially commented on the rumor yet, but we'll let you know when it breaks the silence.

UPDATE: Toyota has issued a statement saying it is not moving all Tundra production to San Antonio.

[Source: PickupTruck.com]

The Italians are coming, the Italians are coming! And when they get here in the guise of Alfa Romeo, they will be looking for a factory where the 8C and other cars wearing the cross and serpent can be built. Alfa is looking at two options regarding a U.S.-based factory: buy one of GM, Ford, or Chrysler's closed factories, or expand a Case New Holland factory.

Case New Holland, which is actually owned by Alfa, makes agricultural machinery and construction equipment. It already has 11 plants in the U.S., and Alfa could simply expand one of them to make cars. The plant, a location for which will be selected in May, will begin churning out Alfas in 2011 or 2012. At capacity, production is expected to be around 150,000 cars for the North American and European markets. Alfa Romeo will decide on the distribution network and particular vehicles to be made within three months, which makes it sound as if the Italians are definitely coming.

[Source: Automotive News, sub. req'd]

The AP got a hold of an internal email sent to all Chrysler employees informing them in no uncertain terms that they will be taking a vacation from July 7 through July 21. While some kind of plant shutdown is apparently common for most automakers during the summer, this corporate-wide stoppage will also include salaried employees, with the exception of a few teams that will stick around to work on special projects. A Chrysler spokesperson didn't divulge any hard details about the reason for the temporary shutdown, other to say that it should help "boost productivity and efficiency."

[Source: AP]

More news from the advancing front of European carmakers expanding eastwards: PSA, Europe's second largest automaker and the French parent company of Peugeot and Citroën, is considering opening its new plant in Russia to partnerships with rival carmakers.

The new factory is located in Kaluga, some 180 km outside of the capital, Moscow. Russia is considered one of the fastest-growing markets worldwide, alongside India and China, where Western automakers have also been setting up factories, principally through joint ventures with local manufacturers. PSA's Kaluga plant, scheduled to begin production in 2010, will start out building only Peugeots and Citroens, principally mid-size automobiles which PSA says accounts for 60% of the Russian market for new cars.

If PSA did look to partner with another automaker for production at Kaluga, it could go even father east to Japan's Mitsubishi, which recently obtained financial incentives from the Russian government to assemble cars there and with which the French carmaker already partners on its SUVs.

[Source: Automotive News Europe – subscription required]

Alfa Romeo isn't kidding around about its return to the US market: Fiat Group CEO Sergio Marchionne revealed that Alfa is planning to open a factory in the United States.

Citing the drop in the US dollar against the Euro as a principal motivating factor, Marchionne said that manufacturing cars in America was vital to the profitability of Alfa's stateside venture. The Canadian-Italian industrialist anticipated that Alfa would only begin making a profit after three or four years in the US.

This won't be the first time a Fiat division has manufactured in the United States. In 1909 the Italian automaker inaugurated a plant in Poughkeepsie in upstate New York which it closed a decade later.

Meanwhile, industry sources indicate that Alfa's main factory at Pomigliano d'Arco in southern Italy will close for two months beginning in January as a last-ditch effort to get Alfa Romeo build quality up to spec or else face complete closure.

[Source: Automotive News (sub. req.) via Italiaspeed]