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VW on the road back to the US
17 Jul 2008Just as General Motors is shedding staff in the US and restructuring its business there, Volkswagen is returning to the country for the first time in 20 years.
VW is opening a $1 billion (£500 million) car plant in Chattanooga, Tennessee, in a bid to boost its lagging US sales.
Like many European businesses exporting to the US, the strong euro has hit its sales. It hopes manufacturing in dollar territory will enable it to price its cars more keenly. The first should roll off the assembly line in 2011.
VW's plan comes as the US car industry is in crisis. High oil prices and weak consumer confidence has meant fewer people are buying new cars, and those who are do not want huge American gas guzzlers.
VW has failed for years to achieve profits in the US where Asian competitors like Toyota have regularly upstaged it.
"We will be selling 800,000 Volkswagens per year in the US by 2018, and this new site will play a key role," said VW CEO Martin Winterkorn.
