VW sources: Huntsville, Ala., favored for U.S. site

Volkswagen's management favors Huntsville in northern Alabama as the site for its new U.S. car plant, Automobilwoche, Automotive News' sister publication, reported today.

The magazine said Chattanooga, Tenn., which is 102 miles north of Huntsville, is the second choice.


Automobilwoche cited sources with direct contact to management board members.

It said VW CEO Martin Winterkorn and the carmaker's head of production, Jochen Heizmann, are expected make a final recommendation Monday, July 14. VW's supervisory board will make a decision on the plant site the following day.

Earlier this year, VW said it had narrowed its search for a location for the plant to the states of Alabama, Tennessee and Michigan.

Timline issues key

On Monday, the The Huntsville Times newspaper said Huntsville is the front-runner for the plant. The newspaper said an incentives package from Tennessee topped Alabama's package in dollar value.

But the newspaper's source said Alabama could meet VW's construction timeline for the plant, while Tennessee couldn't.

Production at the 500 million euro ($788.2 million) plant is set to start in 2010, with an annual capacity of 300,000 cars to be reached by 2018.

VW is planning a U.S. plant to help reach its ambition of more than tripling its annual U.S. sales by 2018 to 1 million, including 800,000 VW brand and 200,000 Audi sales.

[Source : Automotive News .. Sub req.]