VW To Rev Up Tennessee Plant

VW To Rev Up Tennessee Plant

Volkswagen (VW) will invest $340 million in its Chattanooga, Tennessee, plant to build a new sport utility vehicle (SUV).  It will be a five-passenger SUV in the same family line as its seven-passenger Atlas.

With the steel and aluminum tariffs on metal produced outside North America, it makes sense for VW to shift more manufacturing operations to the U.S..

This post is based on the Reuters article, VW to invest $340 million in Tennessee to build new SUV, by David Shephardson, March 19, 2018. Image source: Cultura / Image Source / Monty Rakusen.

Discussion Questions

1. What are the strategic implications of VW’s capacity investment in its Tennessee plant?

Guidance: Discussion points include achieving economy of scale in SUV production, expanding market share for large vehicles, offsetting steel and aluminum tariffs by shifting more manufacturing operations to the U.S.

2. What are the facilitating factors for VW to expand its global operations in the U.S.?

Guidance: Factors include steel and aluminum tariffs on metal produced outside North America, surging demand for SUVs in the U.S., and VW looking to rebuild its image in the U.S. after the diesel-emission scandal.

Facebook
Twitter