FRANKFURT -- Volkswagen Group of America has drawn up detailed plans to squeeze 100,000 more vehicles per year out of its Chattanooga plant, part of its pitch for a new SUV aimed at American consumers.
But while all signs suggest that the SUV will be approved, there's no clear signal that its production is headed for Chattanooga.
Top executives in Germany say decisions on the vehicle and plant site will come by year end. The vehicle is likely to be based on the seven-seat CrossBlue concept that VW exhibited in January at the Detroit auto show. It is "a very well-defined product" at this point, said Jonathan Browning, CEO of Volkswagen Group of America.
"There are some elements of the business case and the manufacturing strategy that still have to be refined," he said in an interview. "But the most important thing -- what the vehicle is, what it needs to do in the marketplace -- is very well understood."
Volkswagen's U.S. executives want to build the prospective SUV in Chattanooga, alongside the Passat sedan, expanding the plant's annual capacity to 250,000 units from 150,000 units by making greater use of the assembly line.
Frank Fischer, head of operations at the Chattanooga plant, spelled out the proposed changes during an interview last month at the plant, which started building the Passat in 2011.
To handle the SUV, Fischer said, VW would need to extend the plant's body shop and assembly space and add tooling to accommodate the underbody of the SUV and the shape of its upper body.
To get to 250,000 vehicles, Fischer said, the plant also would need to add a third team of 40-hours-a-week workers and speed the assembly line. This is well within reach, he said, adding that annual capacity could reach 300,000 with a "big, big effort."
But VW also could produce the SUV in Mexico -- perhaps at the assembly plant in Puebla, at the engine plant in Silao or at the plant being built in San Jose Chiapa to assemble the Audi Q5 crossover, said Michael Macht, the VW board member for production, in an interview.
State and local officials on both sides of the border are lobbying hard to win the new vehicle. During an interview in March, Macht said VW hadn't discussed incentives with state and local governments in the United States and Mexico, but the process is moving along.
"We have talked to the governors," he said last week at a VW event held on the eve of the Frankfurt auto show.
Some observers see Chattanooga as the favorite, as the SUV and the plant have become symbols of VW's mission to become a major player in the United States. Even after the proposed expansion, there would be room at the Chattanooga plant site to build a mirror image of the plant and increase annual capacity to 500,000 or more.
But with a couple hundred million dollars at stake, Macht said, VW will not merely make a "romantic" choice.
"We are professionals. We are not kidding around," he said. "For every serious alternative, [there is] a real serious plan behind it."