VW Now Has Short List of Three Potential US Production Sites
By Brendan Moore
Volkswagen AG has announced that their march towards a U.S. production site in double-quick time has now produced a short list of three possible states. Those states are Tennessee, Alabama, and surprisingly, Michigan.
You know VW is in a hurry if they’re willing to set up shop in a state like Michigan where they are certain to have the U.A.W (United Auto Workers) breathing down their corporate neck. VW North America just recently moved their corporate headquarters from the Detroit, Michigan area to Herndon, Virginia in an effort to get their executives closer to the bulk of their customers on the East Coast of the U.S.
If Volkswagen decides to open a plant, the company is expected to start building cars within the next two years and initially produce 100,000 to 150,000 vehicles annually with a maximum capacity of 250,000 vehicles.
VW is just getting hammered to death on the euro/dollar exchange rate and needs some US production capacity as soon as they get can get it. The company is continuing to be coy about whether or not they will actually build a U.S. plant, publicly stating that they’ll make a decision by end of summer, but most astute observers consider a U.S. plant to be a foregone conclusion. The only open question is where in the United States.
Jill Bratina, a spokesperson for VW, said the value of the euro was “certainly a consideration in the process.” She said the company was making any comment on any particular site in the states.
“We reviewed many excellent sites and the process to narrow down the locations was not an easy one. We look forward to continuing to work with the states of Alabama, Michigan and Tennessee as the evaluation moves forward,” said Stefan Jacoby, Volkswagen Group of America’s president and chief executive, in a recent AP article.
Jacoby said the automaker was evaluating cost, logistics, site readiness and operational considerations as it looks at the three states.
VW has also stated that it wants to build an engine plant in the U.S. as a companion plant to the planned production facility.
In 2007, the VW and Audi brands together sold 328,068 units in the United States, down 0.3 percent from 2006. Volkswagen AG has very ambitious plans for their vehicles in the United States and on a global basis. VW plans to triple sales in the U.S. to a million units by 2018, and plans to become the No. 1 automaker in the world, passing both GM and Toyota, by the same date. VW expects to sell 10 million vehicles annually by 2018.
Back in the U.S., the combined brands ranked ahead of Mercedes-Benz USA in 2007 but behind the BMW Group (including MINI) in U.S. sales. Mercedes and BMW have assembled vehicles in the United States for years, and that U.S. production has stood them in good stead lately as the dollar continues its freefall.
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