Volkswagen to build new mid-size SUV in the U.S.

Volkswagen will add a new 7-passenger SUV to its lineup, a vehicle built in America at its Chattanooga, Tennessee, assembly facility starting in late 2016, according to Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG. While details on its name and mechanical makeup are sparse, the new model is set to slot between the Tiguan and the Touareg and will based on VW's well-received CrossBlue Concept, a plug-in hybrid shown at the 2013 Detroit Auto Show. Developed specifically for the North America, it will be underpinned by the automaker's new MQB architecture. 

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$900 million investment

As a result of this decision, VW will invest some $900 million to fund the project. The Tennessee facility -- currently home to the U.S.-spec Passat - is slated to get roughly $600 million of that amount and add about 2,000 new jobs as part of the expansion process. Winterkorn also announced that Chattanooga has been tapped to become the site of a new, independent National Research & Development and Planning Center of the Volkswagen Group of America that will be responsible for coordinating various projects throughout the North American market.

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"The United States of America is and will remain one of the most important markets for Volkswagen," said Winterkorn, speaking at VW's home base in Wolfsburg, Germany. "Over the past few years, we have achieved a lot there. We are now launching the second phase of the Volkswagen campaign in the U.S. With the midsize SUV, the expansion of the Chattanooga plant and the new development center, the focus is on the wishes of the U.S. customer. This is also a strong signal for the U.S. as an industrial and automobile production location."

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