Volkswagen plans to invest $340 million to bring a third vehicle to its assembly plant in Chattanooga -- a five-seat version of its large Atlas crossover.
The new crossover, in concept form, is to be revealed next week at the New York auto show, said Hinrich Woebcken, CEO of Volkswagen Group of America. It is expected to enter production in late 2019.
Woebcken and Tennessee Gov. Bill Haslam were scheduled to announce the new product plans for the plant Monday afternoon in Chattanooga. No additional jobs in the plant are expected as a result of the new crossover, nor were any state or local incentives negotiated, a spokeswoman for Volkswagen Group of America said.
The new five-passenger version of the Atlas will share a substantial number of components but will feature different styling than the larger three-row, seven-seat crossover that went on sale just under a year ago in the U.S. Its name is to be announced at the New York show. Like the Atlas, the five-seater will be built on Volkswagen's flexible MQB platform, which now underpins most of the automaker's U.S. lineup.
The crossover is part of Woebcken's "doubling up" strategy to expand Volkswagen's sedan-heavy lineup with more crossovers. A two-row version of the long-wheelbase Tiguan crossover that Volkswagen brought to the U.S. last year is expected later on to replace the aging Tiguan Limited.
Volkswagen spent $900 million in 2016 to expand the Chattanooga plant to begin building the Atlas. The plant also assembles the Passat sedan, which it has built since it opened in 2011. The plant is likely to pick up an additional electric vehicle, built on Volkswagen's MEB platform, beginning in 2022, but those plans have yet to be finalized, brand officials said in Germany last week.
The Atlas went on sale in April 2017 and recorded 27,119 sales in the U.S. last year. Volkswagen has added another 9,069 sales of the Atlas during the first two months of this year.