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]
…and what of volume that VW sells comes from Germany anymore anyhow?
That makes no sense. Duties on imported vehicles would tend to want to make VW build MORE in the US to avoid the duties (just as they are intended to do). Right now they are just making noise in the hope of fending off the duties, but once they are passed they will either bend over and shift assembly to the US or pay up.
Right. They’re just kickin’ and spittin’ Get ready to pay up buttercups!
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.
I’ve been to the factory in Chattanooga. Definitely no mtns like that anywhere near it. The Chattanooga mtns don’t look anything like that either.
Good catch. Let’s magically transport via google to VW chattanooga and see if we can find that spot. I haven’t yet.
https://goo.gl/9NUzgh
I m been inside too.
You are correct sir!
THANK YOU MR PRESIDENT! WE’LL SHOW THOSE GERMANS WHO WON THE WAR!