Volkswagen is investing $340 million in its Chattanooga plant to build a new version of its Atlas SUV — a version that will seat five people, unlike the current model that seats seven. Officials made the announcement Monday at the plant and unveiled a concept sketch of the new Atlas.
"The Atlas has built strong momentum for Volkswagen in the SUV segment, and we are excited to grow our SUV portfolio with this new, Chattanooga-assembled five-passenger SUV," said Hinrich Woebcken, CEO of VW's North American region. "We are not only committed to this market, we are committed to our U.S. manufacturing home in Chattanooga, Tennessee."
VW started producing the Atlas in Chattanooga in 2016. The manufacturer has already put about $900 million into its Tennessee plant to build that model.
This new five-seater will likely begin production next year, and it’s the third vehicle to be manufactured in Chattanooga, which is VW’s only assembly plant in the U.S.
The first model built in Tennessee remains in a serious slump, even leading Volkswagen to idle its plant for two weeks this spring. In February, sales of the Passat sedan dropped 50 percent compared to the prior year. As American consumers want more family-friendly SUVs, the German automaker is retooling the plant to boost the 7-passenger Atlas production.
The Passat sedan was also marred by the diesel emissions scandal that affected certain models and cost the automaker billions in fines. Tennessee Governor Bill Haslam touched on the controversy after the 5-passenger Atlas announcement.
"Obviously Volkswagen’s had its challenges the last three or four years," he said. "I think the fact that they’ve stayed here, stayed committed, kept investing, says a lot about the workforce right here in Chattanooga and Hamilton County."
The plant employs around 3,500 people. The new Atlas concept car will be unveiled at next week’s New York International Auto Show.
Michael Edward Miller is a reporter with WUTC in Chattanooga. The original story can be found here.