VW Announces New Engine Plant in Mexico, will Supply Chattanooga Factory with a Latest Generation Powerplant

Volkswagen has revealed plans to open up a new engine plant in Silao, Mexico in 2013 to supply vehicles made in Puebla, Mexico and Chattanooga in the USA with a latest generation powerplant. Construction works for the plant are set to begin this year.

The German firm said the total investment for the development of the new engine -details of which were not released- as well as for building the new site comes to a total of USD 550 million (€ 400 million), adding that the factory will create approximately 700 jobs over the medium term on site.

"North America is and remains one of the biggest and most important markets for the automotive industry," said Prof. Dr. Jochem Heizmann, board member of the Volkswagen Group.

"The current expansion of capacity of the plant in Puebla, the upcoming start of production in Chattanooga, as well as the opening up of the new engine plant in Silao, clearly shows how Volkswagen AG is going on the offensive in North America as well."

Volkswagen said the new plant and engine will further strengthen its market position in North America and help achieve its target sales of one million vehicles in the USA annually from 2018.

Currently, VW produces the Jetta, Golf estate and the New Beetle in Puebla, Mexico. From 2011, production of the firm's New Midsize Sedan (NMS) will begin in Chattanooga, Tennessee.

According to previous statements from company officials, the NMS (seen in these sketches) will be slightly larger than the current-generation Passat, which it will replace here in the States.