Autoblog

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]

With Volkswagen due to make a decision about the location of its first US factory in more than two decades, the next obvious question is what to build there? We had a chance to pose that very question to Steve Keyes, GM of Public Relations for VW of America. According to Steve, the driving force for the factory is two-fold. First and most obvious is the exchange rate issue. With dollar being worth less almost daily against the Euro, it's increasingly difficult for VW to price cars competitively, especially in the mainstream segments where it primarily competes. The second reason is capacity constraints at the Peubla, Mexico factory that builds VW's highest volume US product, the Jetta. VW of America has set a target tripling combined sales of Audi and VW within the next decade.

Meeting those sales goals will require a lot more vehicles to sell at a competitive cost. So the first products out of the plant will likely be the highest volume products, the Passat and Jetta. If the plant is set up to build Jettas, then it could relatively easily be adapted to build any other model that shares the Golf/Jetta platform. That could potentially mean products like the Scirocco and even the Audi TT. Will we see these? Probably not at first, but if demand warrants, it could happen. So if you are all really serious about wanting the Scirocco on US shores, you should start pestering the head office (which just moved to Virginia last week).

[Source: Volkswagen]