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., two people familiar with the matter said.
Chattanooga is the favored location over the automaker’s factory in Puebla, Mexico, said the people, who asked not to be identified speaking ahead of an official announcement.
Carsten Krebs, a spokesman for VW’s U.S. operations, declined to comment. Reuters reported the news earlier Friday.
VW has expanded to become the world’s third-biggest auto manufacturer, ranking behind Toyota Motor Corp. and General Motors Co., thanks to sales increases in countries such as China and Russia. Those gains contrast with a struggle to raise VW’s presence in the U.S., a market that’s crucial to the company’s goal of taking the global industry sales lead by 2018.