Volkswagen plans to expand production at its Chattanooga, Tenn., plant… (EPA )
Volkswagen Group of America has announced plans to add 800 jobs at its factory in Chattanooga, Tenn., to increase production of its hot-selling Passat sedan.
The new positions will bring the total new jobs at the plant to about 1,000 this year and will push overall employment to 3,700, including positions offered by the automaker's contractors.
The expansion comes as the U.S. auto market continues to gain strength after nearly collapsing in 2008 and 2009. Auto information company Kelley Blue Book is projecting that the annual rate of sales will hit 14.6 million this month, the best March since 2007.
Drivers replacing older vehicles, the easing of credit conditions, an improving jobs outlook and growing consumer confidence are aiding the industry’s rebound.
VW has sold almost 58,000 vehicles in the U.S. this year, a 45% gain from 2011 and is on pace to sell more cars here than it has in many decades.
February was the biggest month for Passat – sales of 8,189 cars -- since August 2003, according to auto information company Edmunds.com.
“Quite plainly, we need more Passats to meet the market demand and I’m glad that we can respond so quickly by adding staff in Chattanooga,” said Jonathan Browning, VW’s U.S. chief executive.
The new workers will allow the automaker to extend the plant’s weekly output and reduce the amount of overtime for current workers.
“For now, at least, this extra production will absorb the Passat’s jump in demand in the U.S.,” said Michelle Krebs, an Edmunds.com analyst. “But further down the line, Volkswagen will need to produce even more vehicles in the U.S. to expand its product offerings, a small crossover, for instance, and meet its lofty sales goals.”
VW has said it wants to sell 800,000 vehicles annually in the U.S. by 2018. It sold 324,400 last year.
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