Amid the turmoil of the US auto industry, with bailouts and possible bankruptcies. Many fear the failure of the big three automakers: Ford, Chrysler, and General Motors.
With all this doom and gloom in the US automakers from other countries are seeing a chance to really get a foothold in the worlds largest market for cars. Volkswagen, the largest German car manufacturer is making a bold move to secure a position to take advantage of the golden opportunity to fill the void in the case that one of the big 3 fails. They plan to sell 800,000 automobiles annually in the US by 2018. The first step in this process building a new $1 billion production site in Chattanooga, Tennessee. A grounding breaking ceremony is planned for January. They intend to build 150,000 new mid-sized sedans annually, specifically designed for the US market. The new plant is expected to bring 2,000 jobs to the area. Although an independent study from the University of TN predicts it will create an additional 9,000 jobs from suppliers, dealers and other spin off business. Chattanooga was chosen a head of Detroit, Michigan and Huntsville Alabama.
Other foreign auto assembly plants in the southeast include: Honda in Lincoln, Ala.; the plant Kia Motors Corp. is building at West Point, Ga., and Nissan at Smyrna, all about 100 miles away. Tennessee is also corporate home to Nissan North America, which dedicates a new headquarters July 22 in the Nashville suburb of Franklin. Plus, BMW has a plant in Spartanburg, South Carolina and Mercedes Benz has a plant in Vance, Alabama. The southeast is really becoming the mecca of foreign automakers in the USA.
If the US auto industry fails, could VW take over?
They plan to sell 800,000 automobiles annually in the US by 2018.Their peak year in the US was 1970, when they sold 570,000, so given that the US population has grown from 203 million to 305 million, it’s certainly possible. On the other hand, it’s not a shortage of cars that’s keeping them from selling 800,000 now, it’s a shortage of customers. Will the Tennessee plant be producing customers? I thought they proved Say’s Law to be wrong once before, when they built a factory in Pennsylvania in 1978. It only operated for 10 years before they shut it down.