Chattanooga in Pole Position for CUV Program

DETROIT – Volkswagen’s U.S. facility appears the odds-on favorite to build a new midsize cross/utility vehicle, if the German auto maker green-lights the project for production.

At the North American International Auto Show here this week, VW unveiled a new CUV concept, dubbed the CrossBlue, that has full production intent and would be targeted against the Ford Explorer, Honda Pilot and other key competitors in one of the U.S.’s fastest-growing segment.

If approved for production, the auto maker says it would build the vehicle in the dollar zone, meaning the CrossBlue would be sourced either at its Chattanooga, TN, plant in the U.S.; its Puebla, Mexico, facility that makes the Jetta and Beetle; or a new factory planned for San Jose Chiapa, Mexico, that will build Audi Q5s beginning in 2016.

Although all three facilities would be given a chance to bid for the project, officials say, Chattanooga looks to have the inside track. The plant was designed specifically to build models off of VW’s new MQB architecture that would underpin the CrossBlue.

The MQB, which debuted with the Audi A3 and supports the new VW Golf that is just rolling out in Europe, will be ubiquitous at Volkswagen, eventually forming the basis for everything from the Polo to the Passat.

Although the current Passat isn’t based on the MQB, VW set up the Chattanooga plant with the next-generation in mind, meaning its production processes already are designed to easily accommodate the new architecture.

“The (current) Passat is not MQB, but we have made the design so that the construction of the body follows the rules of the MQB,” Ulrich Hackenberg, head of product development, says at the auto show. “So the factory is more or less an MQB factory.

“To switch to an MQB product is quite easy at the factory, so it costs only a small (amount of) money.”

Chattanooga also has room for expansion. Output of the Passat last year totaled 152,522 units, according to WardsAuto data, and this year VW is looking to build 170,000 of the sedans on three crews of production.

Capacity of the existing facility could be taken up to 250,000 units annually within the existing structure, insiders say, which the auto maker believes could be enough volume to accommodate the CrossBlue.

A WardsAuto/AutomotiveCompass production forecast calls for output of the CUV to get under way at Chattanooga in May 2015, with volume estimated at 55,000-60,000 units annually.

“There would have to be some body-shop investment, but the (CrossBlue) could be (built) in the current setup and be made on the same line (as the Passat),” Frank Fischer, chairman of the Chattanooga operation tells reporters following a Job One ceremony at VW’s new Silao, Mexico, engine plant, which will supply the U.S. facility beginning in the ’14 model year.

“I don’t know where (the CrossBlue) will be built, but I can promise you we are working hard to get it to Chattanooga,” Fischer adds. “But we’ll be competing with the other (North American) plants.”

The CrossBlue uses a unique, slightly bigger version of the MQB that Hackenberg says would require a few exclusive components, including larger wheels, because of its size and higher load requirements.

“But the (basic) architecture is MQB, so it will be producible in an MQB plant,” he says.

In addition to the CUV, VW would use the MQB-plus platform for models to be built and sold in China.

“And we will look for some (additional) derivatives,” he adds. “We will need some scale.”

Hackenberg says the CrossBlue could be readied for production rather quickly, if VW’s management board gives the CUV the nod.

“If you make a design freeze, it would take around two years, maybe a little bit more,” he says.

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