N.C. loses out - VW taps Tennessee for new US production site

Posted July 15, 2008 10:09 a.m. EDT
Updated July 15, 2008 10:31 a.m. EDT

— Volkswagen AG is headed to Tennessee to build cars in the U.S. after picking the southern state as the site for its new plant.

Chattanooga, Tennessee, beat out bids by Alabama and Michigan for the new plant, which is part of the Wolfsburg-based company's strategy to increase its presence in America.

The announcement came Tuesday from Lower Saxony Minister President Christian Wulff, who sits on the supervisory board of Europe's largest automaker.

North Carolina had hoped to land the plant. The state was one of several states being considered as sites for a new automotive plant that Volkswagen wants to build in the U.S., according to several media reports.

Automotive Week, Business Week magazine and Bloomberg all said in January that Volkswagen would announce plans for a U.S. factory. Both the Carolinas as well as Georgia and Kentucky are in the running, they said.

One site apparently on the list is near Rocky Mount, Automotive Week reported.

Volkswagen recently moved its U.S. headquarters to Herndon, Va. from Detroit.

The Rocky Mount Telegram reported that one possible site is a 1,000-acre tract of land alongside I-95. The newspaper said the land could be sold in the near future to an unidentified buyer for some $10 million.

“The Carolinas and Georgia are leading candidates to produce vehicles for the United States and Europe,” Automotive Week reported.

Business Week, meanwhile, said a search committee had  scouted North Carolina: and other states for Volkswagen. A plant in the U.S. is seen as being essential for Volkswagen’s strategy of selling 800,000 vehicles in the U.S. by 2018.