Volkswagen to expand rail-served automotive plant in Tennessee

Volkswagen Group of America on Monday announced plans to expand its automotive plant in Chattanooga, Tenn., to produce a new midsize sport utility vehicle (SUV).

The company expects to spend $900 million to build the newly developed, seven-passenger SUV at the manufacturing facility, which is served by CSX Transportation and Norfolk Southern Railway.

Volkswagen Group of America also plans to construct an independent National Research & Development and Planning Center in Chattanooga that would integrate customers’ feedback into existing and planned vehicle models. From 2014 to 2018, the company expects to invest more than $7 billion in the United States and Mexico to achieve a goal of delivering 800,000 vehicles in the U.S. by 2018.

"The impact of this announcement goes far beyond the 2,000 new jobs [to be created] because of the large multiplier effect of the automotive industry," said Tennessee Gov. Bill Haslam in a press release.