In a sign of confidence despite rising friction on international trade, Volkswagen will invest another $340 million to build SUVs at its Chattanooga, Tennessee plant, the company announced March 19.
VW said the funds will go towards beefing up the plant to build additional Atlas sport utility vehicles geared towards the U.S. market.
VW plans a five-passenger version of the vehicle in addition to the seven-passenger Atlas that was introduced in 2017.
"The Atlas has built strong momentum for Volkswagen in the SUV segment, and we are excited to grow our SUV portfolio with this new, Chattanooga-assembled five-passenger SUV," said Hinrich Woebcken, CEO of Volkswagen Group of America.
"We are not only committed to this market, we are committed to our U.S. manufacturing home in Chattanooga, Tennessee."
The move comes after President Donald Trump earlier this month imposed steep tariffs on imported steel and aluminum, a move that drew sharp criticism from U.S. trading partners and prompted European Union officials to threaten to retaliate against some U.S. goods.
Trump also has singled out German carmakers as a potential target for tariffs in an escalating conflict. Analysts warn the situation has increased the risk of a trade war. German Economy Minister Peter Altmaier expressed optimism about the possibility of resolving the tariff issue. Talks this week could make it "possible to find a solution that can still avoid a decline into a heavy trade conflict," Altmaier said.
Copyright Agence France-Presse, 2017