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Scott Jagow: Now, let's set the way back machine to 1988.
That's when Volkswagen closed its last U.S. car making plant. But the German car maker wants to make a comeback here. Alisa Roth explains.

Alisa Roth: BMW, Mercedes and Toyota already build vehicles here. It helps save on shipping costs, for one thing. Being closer to their American customers also helps them hedge against other costs, including fluctuations in currency rates.

Michael Robinet studies the global car market. He says if the dollar is weak against other currencies, as it is right now, cars assembled overseas can be very expensive to sell here. That's been a big problem for VW.

Michael Robinet: They've had a lot of difficulties competing in this market, given the rise of the Euro vis-a-vis the U.S. dollar. And that is a major driver why they are finally deciding to locate production capacity in North America.

VW already has plants in Mexico. It even exports some cars made there back to Europe. Robinet thinks that could also happen to cars made at the new American plant.

Alabama, Tennessee and Michigan are the on the short list for the site. VW says it'll announce the final choice in July.

In New York, I'm Alisa Roth for Marketplace.