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Volkswagen returns to the U.S. to build cars

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Steve Chiotakis: Today, the V in VW today stands for Volunteer State. Volkswagen opens a new factory in Chattanooga, Tennessee. The German automaker says its goal is to beat out Toyota and General Motors to become the world's number one carmaker within the next seven years. To do that, Volkswagen aims to triple sales here in the U.S.

And reporter Sally Herships tells us the new plant fits right into that plan.


Sally Herships: One of every nine new cars sold globally last year was made by Volkswagen. But in the U.S., this major brand is a niche player, on par with Subaru. Part of the problem is it hasn't made cars in the country since the late '80s.

David Cole: If you're going to be competitive, you generally have to build your cars where you sell your cars.

David Cole is chairman emeritus for the Center of Automotive Research. He says building a plant locally can help protect manufacturers from fluctuating exchange rates. And, by choosing the South, Volkswagen joins other carmakers looking for lower cost auto workers. The plant is expected to crank out 150,000 cars a year, starting with the Passat. But the car's design has been tailored for American consumers.

Bill Visnic: It took German carmakers a long time to understand that U.S. buyers wanted cup holders.

Bill Visnic is senior editor at AutoObserver.com. He says there are big differences between what European and American consumers want in a car.

Visnic: First and foremost is interior size; Americans like cars that they feel like they can stretch out in a little bit inside.

Volkswagen says its American Passat is a few inches longer and wider than the German version, and several thousand dollars cheaper. It will also have more cup holders: eight for a car that seats five people.

I'm Sally Herships for Marketplace.

About the author

Sally Herships is a regular contributor to Marketplace.
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