CHATTANOOGA, Tennessee -- After two decades of trying to serve the U.S. market from a low-cost production base in Puebla, Mexico, Volkswagen is returning to the United States with an entirely new strategy.
The German company is preparing to build cars here, relying on local suppliers, taking advantage of lower transportation costs, and tapping U.S. managers and engineers.
The concept is vastly different from VW's plan of action when it built cars in Westmoreland, Pennsylvania, in the 1970s and 1980s. It was the first transplant auto assembly operation n the Unitd States.
And VW wants its U.S. assembly plant, now under construction on the 1,350-acre site of a former U.S. military explosives plant in Chattanooga, to be up and running quickly — in time to enjoy the snapback in U.S. auto sales.
To achieve that, Volkswagen has adopted the model for flexible, standardized factories that it has used elsewhere in the world.
"Chattanooga is integrated into a global Volkswagen strategy," said Stefan Jacoby, VW Group of America CEO.
The United States is "our weakest market in terms of penetration," he said. "We can't be a global player without having a decent market share in the United States."