Volkswagen confirmed this morning that a midsize, seven-seat SUV based on 2013’s CrossBlue concept will be built at its plant in Chattanooga, Tennessee, where the U.A.W. plans to form a new local. VW is hoping the new model will help it gain sales in America’s all-important SUV market, where the existing Touareg has failed to gain traction due to its lack of third-row seats and less competitive pricing compared to similar vehicles from American and Japanese rivals.

VW will invest around $900 million in the project and in the process create an additional 2,000 jobs, 200 of which will be engineering positions at a new R&D center located at the site. In a statement, Volkswagen Group CEO Martin Winterkorn said production of the SUV will start in late 2016.

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The new SUV will be integrated into existing plant structures at Chattanooga. It will ride on VW Group’s flexible MQB platform, thus paving the way for America’s Passat to eventually adopt the platform of the Passat sold elsewhere. VW states that the new SUV is being developed especially for the North American, suggesting that other markets will miss out on it.

“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,” Martin Winterkorn said in a statement. “Our big objective is clear: By 2018, the Volkswagen brand wants to sell about 800,000 vehicles per year in the U.S.”

VW managed to sell 407,704 vehicles in the U.S. last year, which was down 7 percent on the previous year. So far this year the brand’s sales here are down 13 percent but the 2015 Golf range has only just gone on sale and an updated Touareg is due soon.

No additional details on the new SUV were revealed. The CrossBlue concept was said to be compatible with a range of four-cylinder engines as well as a plug-in hybrid system.


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