Reports: VW Has Chosen Chattanooga for SUV

Volkswagen AG has decided to add SUV production at its auto plant in Chattanooga, Tenn., and could announce the plan next week during the Detroit auto show, according to a Reuters source.

Automotive News said in September that VW had chosen the U.S. site to build a three-row crossover/SUV, but the company said at the time no decision had been made.

VW of America CEO Jonathan Browning said in August that a decision on where to produce the vehicle would be made by year-end, adding that production could start in 2015. Unnamed sources tell Bloomberg News that VW favors the Chattanooga location for undisclosed reasons.

Reports speculate the vehicle will be a production version of the CrossBlue concept VW presented at the Detroit auto show last year.

The two-year-old Tennessee plant has annual capacity to make 150,000 vehicles and could be expanded to 250,000 units per year. The factory made about 109,700 midsize Passat sedans in 2013, according to Bloomberg.

Separately, VW's Audi unit plans to begin making small luxury crossover/SUVs at the $1.2 billion plant it is constructing in San Jose Chiapa, Mexico, in 2016.