Volkswagen Crossover Will Be Built In Chattanooga

Derek Kreindler
by Derek Kreindler

Reuters is reporting that the long-awaited decision on the production site of Volkswagen’s new crossover is set to be handed down any day now, and the winner is Chattanooga.

According to Reuters, a generous incentive package swayed the decision to build the new CUV in the United States, rather than Mexico

The state of Tennessee is offering tax breaks, staff training, free land and infrastructure upgrades worth about $300 million in total, giving it a clear edge over Puebla, Mexico

Dealers have been crying out for a CUV sized above the Touraeg, but priced closer to the Honda Pilot (rather than in the pseudo-luxury space occupied by the Touraeg). With CUV sales growing in globally, the lack of competitive crossovers in Volkswagen’s North American product portfolio is undoubtedly holding them back from further growth in North America. The new three-row CUV should help put them on track – but without a next-generation Tiguan that’s adapted to North American tastes, it may be too little too late.

Derek Kreindler
Derek Kreindler

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7 of 27 comments
  • LeMansteve LeMansteve on Jun 23, 2014

    So, reading between the lines, this new SUV will replace the Touareg?

  • Schmitt trigger Schmitt trigger on Jun 23, 2014

    Thank you Chattanooga, for helping us defeat the UAW. Here is your well deserved payment! Sorry, I could not resist....However and sarcasm aside, does anyone think that the State of Tennessee would have provided $300 mill in incentives to an UAW facility?

    • Dave M. Dave M. on Jun 23, 2014

      See Redav's response above. The UAW vote and the expansion incentives are two different issues in my mind.

  • Extra Credit Extra Credit on Jun 23, 2014

    I doubt the new CUV will replace the Touareg. I expect to see Volkswagen double down on their CUV offerings over the coming years, if they are serious about achieving greater volume in North America. Perhaps this new entry will be the first of many. Time will tell...

  • Rick T. Rick T. on Jun 23, 2014

    Interesting. I am consulting in an office complex at a major intersection off I-65 south of Nashville. Last week I saw an auto transport at a motel nearby. It had a number of VW's on it including a couple of SUV/CUV shaped vehicles draped in what looked like burquas - white cloth with a screened windshield - on them. Thought about taking a picture but eh.

    • See 1 previous
    • Rick T. Rick T. on Jun 23, 2014

      @Extra Credit Hey, didn't know that. Thanks. There were only three vehicles on the trailer, two of which had those coverings. The other was a Passat. It was early morning and only about 10 minutes from the VW dealer and a couple hours from Chattanooga.