Expanded Production in U.S. Hinges on Trump Trade Decision, Volkswagen Hints

Steph Willems
by Steph Willems

Volkswagen’s sole U.S. assembly plant was spared any fallout from the company’s wildly expensive diesel emissions scandal, but the upcoming North American Free Trade Agreement negotiations could see VW throttle back its future plans for the facility.

The Chattanooga plant, which builds the Passat and Atlas, has seen $900 million in investment over the last couple of years. More models are anticipated, and the automaker said it expects the plant to reach full production by 2020. However, recent threats of an import tax to be levied on German automakers has VW brass in wait-and-see mode before sending any new models or money to Tennessee.

Volkswagen brand chief Herbert Diess made a telling remark outside yesterday’s unveiling of the Arteon luxury sedan in Germany, Bloomberg reports.

“It has been a roller-coaster of emotions over the past months,” Diess said. “We hope that we’re going to have clarity in the next months. It influences investment decisions.”

Diess was referring to rhetoric emanating from the Trump administration, which hopes to redraw NAFTA in a manner that prioritizes U.S. workers and industry. One way it could do that is to levy an import tax on foreign automakers. That would be bad news for an automaker that imports the bulk of the vehicles it sells in the U.S. from factories in Mexico and Europe.

Before any new investment occurs in the U.S., Diess and other top brass want to know the U.S.’s intentions.

Chattanooga took on a larger presence in VW’s global portfolio following the diesel debacle. As a way to boost revenue and sales, the automaker plans to offer new crossover and SUV models to a utility-hungry America. Some of those vehicles, as well as the company’s future crop of electric vehicles, were expected to find a production home in an American plant.

“We will be significantly stepping up our activities in the USA,” Diess said in a statement last November, emphasizing a focus on SUVs. “In a second stage, we will then take our new electric cars to North America.”

Those electric vehicles, which share the same architecture as its I.D. concept vehicles, would appear in 2021, Diess said at the time. NAFTA talk are expected to get underway in August.

[Image: Volkswagen]

Steph Willems
Steph Willems

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  • Yankinwaoz Yankinwaoz on Jun 01, 2017

    What the hell is up with that photo? Those are not Appalachian mountains. Looks like SoCal mountains. Probably up near Valencia just north of LA. Weird that they put a wall with the name of the town in Tennessee where they have their US plan in the middle of SoCal.

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    • Redapple Redapple on Jun 02, 2017

      @joeaverage I m been inside too. You are correct sir!

  • Tod stiles Tod stiles on Jun 02, 2017


  • Dave M. The Outback alternates between decent design and goofy design every generation. 2005 was attractive, 2010 goofy. 2015 decent. 2020 good, but the ‘23 refresh hideous.Looking forward to the Outback hybrid in ‘26…..
  • Lorenzo Subaru had the ideal wagon - in 1995. The Legacy Outback was a straight two-box design with rear quarter and back windows you could see out of, and was available in brown with a 5-speed manual, as God and TTAC commenters intended. It's nice they're not raising prices, but when you've lost the plot, does it matter?
  • Bkojote Remember a month a go when Cleveland wanted to create a more walkable Cleveland and TTAC's 'BIG GOVERNMENT IS THE PROBLEM' dumbest and dullest all collectively crapped their diapers? Here's the thing- look on any American highway and it's littered with people who don't /want/ to be driving or shouldn't be. Look at every Becky on her phone during the morning commute in her Tucson, look at every Brad aggro driving his 84 month loan GMC. Hell look how many drivers nowadays can't even operate a headlight switch. You expect these people to understand a stoplight? In my neighborhood alone 4 people have been rear ended at lights from someone on their phone. Distracted driving over the past 10 years has spiked, and it's only going to get worse unless Becky has an alternative, because no judge is going to pull her license when 'she needs it to get to work!' but heaven forbid she not check fb/tiktok for 40 minutes a day.
  • Scott Shouldn't the The Italian Minister for Business be criticizing The Milano for being too ugly to be Italian?Better use of resources doing that....
  • Steve Biro Frankly, while I can do without Eyesight and automatic start-stop, there is generally less B-S with Subarus in terms of design, utility and off-road chops than with many other brands. I just hope that when they adopt Toyota’s hybrid system, they’ll also use Toyota’s eCVT.