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Volkswagen to crank up U.S. Passat production

Mon, 01 Aug 2011

Volkswagen of America is prepared to expand production of the U.S. Passat less than four months after building its first one.

The automaker is looking for a sign from the market to boost production at its just-opened plant in Chattanooga, Tenn.

"We've already taken steps to decide how we will do it," Don Jackson, president of manufacturing at the Chattanooga operations, said after speaking to an industry conference in Traverse City, Mich., on Monday. "We've looked at the different shift models to do it. We have the planning all done. We just haven't pulled the trigger."

The plant, constructed to build up to 150,000 vehicles a year, would make adjustments to boost the volume to between 200,000 and 220,000 annually.

The early optimism is significant for Volkswagen. Its Passat has been a distant also-ran in the U.S. market for a decade, frustrating VW's desire to increase its market share here. Last year, U.S. consumers bought fewer than 13,000 Passats, compared with more than 311,000 Honda Accords and more than 327,000 Toyota Camrys.

Jackson said that Chattanooga will build 45,000 to 50,000 Passats by year end as it ramps up.

The plant builds a different version of the Volkswagen Passat than the one sold in Europe and other markets. Jackson said Chattanooga also plans to export the car to South Korea.

He said the increase in output is a separate issue from longer-range expansion plans that exist for Chattanooga, depending on market demand. The Volkswagen factory was built with an eye toward more than doubling its size to around 500,000 vehicles a year as it adds models. That increase would require a large-scale new investment.

Volkswagen spent $1 billion to open the plant.

Jackson said no decisions have been made about adding a second Volkswagen model.

By Lindsay Chappell- Automotive News