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Volkswagen Invests South Of The Border

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photo credit: Scorpion EPH (wikimedia commons)

photo credit: Scorpion EPH (wikimedia commons)

Volkswagen has set a lofty goal of tripling VW and Audi sales in the U.S. by calendar year 2018. To help meet that objective, the company began construction of a new factory facility in Chattanooga, Tennessee in May. Now comes word that the company is also investing a whopping $1 billion to expand and improve its only existing North American facility--and the company's largest outside Germany--located in the state of Puebla, Mexico.

The investment comes as that plant (formally known as "Volkswagen de Mexico S.A. de C.V.") prepares to add a new vehicle to its production lineup, which currently includes the Jetta/Bora and the New Beetle. VW spokesperson Consuelo Minutti confirmed that production of the new model will start "in March or April of 2010", but there's no word as to which model it will be. The majority of vehicles produced at the facility are exported to Canada, Europe, and the U.S.

This is great news for Mexico, which depends on the auto industry for about 20% of its manufactured exports. Volkswagen is the second biggest auto manufacturer in the country, and current production at the facility is down over 22% from last year. (Although that's better than the industry average in Mexico which is down nearly 50%.) Given the plant's expansion, that statistic will almost certainly improve in the coming months.

But the question remains: are a new factory in Tennessee (that will produce a midsize sedan) and increased production at a Mexican facility (to manufacture another vehicle TBA) enough to help Volkswagen meet its 2018 sales goal?

[AutoNews, sub req'd]

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