Volkswagen to invest up to $1 billion in new U.S. plant in Chattanooga UPDATE

FRANKFURT (Thomson Financial) - Volkswagen AG (other-otc: VLKAF.PK - news - people ). said it will invest up to $1 billion in a new plant in Chattanooga in the U.S. state of Tennessee.

The factory will at the 'first stage of construction' have an annual capacity of 150,000 vehicles and will start operations in early 2011, the company said in a statement.

The first vehicle to be made at the factory will be 'a new midsize sedan' tailored to the U.S. market, the German carmaker said.

'We will be selling 800,000 Volkswagen per year in the U.S. by 2018, and this new site will play a key role,' chief executive Martin Winterkorn said in the statement.

Volkswagen said it originally short-listed 25 potential sites for its U.S. plant and picked Chattanooga because it 'slightly' outperforms the next-best candidate sites in terms of nearby automotive suppliers, qualified workforce and properties.


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