The new VW warehouse will help support the production of the Americanized Passat at the maker's new Chattanooga assembly plant.
A confident Volkswagen Group of America is moving ahead with its brick and mortar expansion in the U.S. With production steadily ramping up at the maker’s new American assembly plant, the German maker will invest another $40 million to build a warehouse in Roane County, Tenn. for distributing domestic auto parts for the Chattanooga-made Passat.
The 400,000-square-foot facility is expected to open by spring 2013 and will employ up to 45 people by 2016.
Though a relatively small investment compared to the roughly $1 billion Chattanooga plant, it underscores VW’s sharp shift in focus. Ever since closing an older plant in Westmoreland, Pennsylvania, a quarter century ago, the maker had downplayed the U.S. market. But company planners now see the States as essential to achieving their global growth targets – VW aiming to be the world’s largest automaker by 2018.
The shift – supported by the Tennessee plant and a series of products, such as the new Passat, developed specifically for the American market – has been paying off. Last month alone, VW of America’s sales soared 42%, giving the subsidiary its best month in more than four decades.
The new warehouse will help address the need for more infrastructure, VW officials said. The new warehouse will begin as a redistribution center to service other warehouses and will later expand to include a parts distribution center. The redistribution Master Depot will support the US, Canada and Mexico. In addition, the parts distribution operation will improve service parts delivery times to over 100 dealers in the surrounding regions.
“This new facility is exemplary of the commitment that Volkswagen Group of America has to meeting the needs of our dealers and our growing customer base,” said Rawdon Glover, Executive Vice President of Aftersales, Volkswagen Group of America. “Our continued investment in the U.S. market affirms that Volkswagen is dedicated to the economic vitalization of the communities where we do business.”
Company officials have hinted that VW is far from through with its U.S. expansion. The Chattanooga plant site was chosen, in part, because it offered significant room for growth and based on current demand there could very well be an expansion of the original plant’s footprint within the next several years in order to both keep up with demand for the Passat and possibly introduce other American-made models.
“I’m grateful Volkswagen is expanding its presence here in the state and bringing new jobs to Roane County,” said Tennessee Governor Bill Haslam, “because projects such as this bring more direct and indirect investments to Tennessee.”
Paul A. Eisenstein, contributed to this report.