FRANKFURT, Germany — Volkswagen AG has picked Chattanooga, Tenn., over sites in two other states for its new U.S. auto plant, Europe’s biggest automaker said Tuesday.
Sites in Alabama and Michigan were also considered for the plant, which is part of Volkswagen’s strategy to increase its presence in America. The company closed its last U.S. production facility in 1988 in western Pennsylvania.
Christian Wulff, the governor of Lower Saxony and a member of VW’s supervisory board, told The Associated Press that Volkswagen picked Chattanooga after the board debated the merits of the location and its benefits.
Volkswagen said in a later statement that it approved up to $991.4 million to build the facility, with the plant aiming for a capacity of 150,000 cars a year. It plans to employ 2,000 workers when it starts production in 2011.
‘‘The USA market is an important part of our volume strategy and we are now very resolutely accessing that market,’’ chief executive Martin Winterkorn said in the statement. ‘‘Volkswagen will be extremely active there.’’
The company holds only a 2 percent share of the U.S. market. VW officials have said the company intends to more than triple its U.S. sales to 1 million by 2018.
The German state of Lower Saxony owns more than 20 percent of Volkswagen.
Wulff said the new plant in the U.S., in addition to its factories in India and Russia, is part of the company’s strategy to become the world’s No. 2 automaker.
The automaker has said the surging euro has pushed along plans for a new production facility. The 15-nation currency hit a record high of $1.6038 on Tuesday, making goods exported from Germany more expensive in the United States.
Shares of Volkswagen, whose brands include VW, Audi, Skoda, Bentley, Bugatti and Seat, were steady at 169.78 euros ($271.48) after the decision.
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AP Business Write Antje Homburger in Hamburg, Germany contributed to this report.
Sites in Alabama and Michigan were also considered for the plant, which is part of Volkswagen’s strategy to increase its presence in America. The company closed its last U.S. production facility in 1988 in western Pennsylvania.
Christian Wulff, the governor of Lower Saxony and a member of VW’s supervisory board, told The Associated Press that Volkswagen picked Chattanooga after the board debated the merits of the location and its benefits.
Volkswagen said in a later statement that it approved up to $991.4 million to build the facility, with the plant aiming for a capacity of 150,000 cars a year. It plans to employ 2,000 workers when it starts production in 2011.
‘‘The USA market is an important part of our volume strategy and we are now very resolutely accessing that market,’’ chief executive Martin Winterkorn said in the statement. ‘‘Volkswagen will be extremely active there.’’
The company holds only a 2 percent share of the U.S. market. VW officials have said the company intends to more than triple its U.S. sales to 1 million by 2018.
The German state of Lower Saxony owns more than 20 percent of Volkswagen.
Wulff said the new plant in the U.S., in addition to its factories in India and Russia, is part of the company’s strategy to become the world’s No. 2 automaker.
The automaker has said the surging euro has pushed along plans for a new production facility. The 15-nation currency hit a record high of $1.6038 on Tuesday, making goods exported from Germany more expensive in the United States.
Shares of Volkswagen, whose brands include VW, Audi, Skoda, Bentley, Bugatti and Seat, were steady at 169.78 euros ($271.48) after the decision.
———
AP Business Write Antje Homburger in Hamburg, Germany contributed to this report.