DETROIT (Bloomberg) -- Volkswagen plans to debut a subcompact SUV in the United States as soon as 2016 and may build it at its Tennessee factory.
"Chattanooga is in the lead" to build the small SUV, Marc Trahan, executive vice president of VW of America, told reporters following a speech to the Automotive Press Association in Detroit on Tuesday. "We've made a significant investment in Chattanooga and it's one that we want to have its full potential realized."
Trahan's statement was the clearest signal yet that the Chattanooga plant could get the vehicle, which also could be produced in Mexico depending on what the VW brass in Germany decides.
Automotive News reported on the SUV plans for the Tennessee plant in its Sept. 16 edition.
Volkswagen is looking to increased deliveries in the U.S. to help it achieve its target of becoming the world's largest automaker by 2018. U.S. sales of VW-brand vehicles, including the Passat sedan produced at the $1 billion Tennessee factory, fell 1.3 percent to 282,913 this year through August.
VW will decide where to build its small SUV by the end of the year and cost will be the determining factor, Trahan said. At this stage, the Chattanooga plant would beat a VW factory in Mexico, he said.
"For me, the answer is obvious, but we have to go through a pretty deliberative decision-making process," Trahan said. "Additional product will go in" the Chattanooga plant. "It's not a question of if. It's a question of when and what."
Trahan declined to discuss VW's ongoing talks with the UAW about representing workers at the plant.
VW and the UAW met in Germany Aug. 30 to discuss establishing a German-style works council at the Chattanooga factory. The meeting in Wolfsburg focused how the automaker might recognize the UAW as a representative of its Chattanooga workers and how to set up a works council comprised of union and management representatives.
Automotive News contributed to this report.
