Volkswagen AG, Europe’s largest carmaker, will add a mid-sized sport utility vehicle in the U.S. and will likely build the SUV at a factory in Chattanooga, Tenn., according to two people familiar with the matter.
Chattanooga is the favored location over the automaker’s factory in Puebla, Mexico, said the people, who asked not to be identified by speaking ahead of an official announcement.
Carsten Krebs, a spokesman for VW’s U.S. operations, declined to comment. Reuters reported the expected decision Friday.
VW has expanded to become the world’s third-biggest auto manufacturer, ranking behind Toyota and General Motors, thanks to sales increases in countries such as China and Russia.
Those gains contrast with a struggle to raise VW’s presence in the United States, a market that’s crucial to the company’s goal of taking the global industry sales lead by 2018.
