WINDSOR, ON – Volkswagen Group of America Inc. has yet to produce a single unit at its new plant in Chattanooga, TN, however the auto maker already is exploring a supply-base upgrade.

“What we will do is a second phase of localization,” says Thomas van Loon-Behr, general manager-production purchasing.

That process already is in the works and could lead to domestic production of a dual-clutch transmission, van Loon-Behr says here on the sidelines of a conference sponsored by Canada’s Automotive Parts Manufacturers’ Assn. and Auto21, a consortium of top Canadian universities involved in industry research.

The car set for production at VW’s $1 billion greenfield site in Chattanooga is, to date, described as the “NMS,” short for New Midsize Sedan. Output is scheduled for early 2011.

The car will feature a dual-clutch transmission as optional equipment. That component, as well as two of the car’s three engine choices – a gasoline-powered V-6 and a 4-cyl. diesel – are among 15% of parts that will come from Germany and elsewhere outside the NAFTA region.

VW had set a domestic sourcing target of 80%, but the auto maker was able to exceed that benchmark by 5%.

“We found very capable and very good suppliers,” van Loon-Behr tells Ward’s after outlining in a presentation the rigorous steps VW takes to choose its suppliers.

Chattanooga suppliers followed the auto maker’s “forward sourcing” track for new product programs. The “global sourcing” track is populated by existing programs, he adds.

To even be considered, a supplier must score at least a B-rating in a quality audit. And by the time production begins, all suppliers must achieve VW’s A-rating.

Chattanooga, like most VW plants around the world, is adjacent to a supplier park that today is so full, “It’s not possible to add any more,” van Loon-Behr says.

But as the second phase of sourcing progresses, VW is pondering an additional building in the 2015 timeframe to accommodate a new contingent of suppliers. Populating the supplier park now are:

  • Canada’s Magna Exteriors and Interiors, which will supply fascias, sealing systems and B- and C-pillar trim.
  • Chattanooga Seating Systems, forged from partnership between Magna Seating and minority-owned, Michigan-based Hollingsworth Logistics.
  • Tennessee-based M-Tek, which will provide assembly and sequencing of headliners and door panels.
  • and Faurecia SA and ThyssenKrupp AG of France and Germany, respectively. Faurecia will supply exhaust systems, while ThyssenKrupp will provide chassis systems, van Loor-Behr says.

Stampings will be come from Gestamp Corp., which built a new plant outside VW’s supplier park, but nearby.

VW says the assembly plant’s annual volume is 150,000 units.