VW plans second SUV at Tennessee factory, investing $340 million more

UPDATE: Volkswagen's 5-seat SUV named Atlas, variant of larger SUV built in Chattanooga

Volkswagen will show off the concept version of the two-row Atlas at next week's New York Auto Show. The new, smaller variant to the Atlas will be the third Volkswagen model assembled at the Chattanooga factory.

VW said it would reveal the model's name in NY. This is in addition to about US$900 million (about RM3.5 billion) already invested to expand the plant for Atlas production.

The move comes after President Donald Trump earlier this month imposed steep tariffs on imported steel and aluminum, a move that drew sharp criticism from United States trading partners and prompted European Union officials to threaten to retaliate against some USA goods.

VW didn't say if the new model will also be called Atlas or if it will have a new name.

No jobs will be added to produce the additional vehicle, but it should improve job security at the factory, a spokeswoman said by email.

As you can see in the teaser above, the new SUV concept takes a lot of its design cues from the larger Atlas.

Nasty trade talk hasn't turned the largest German automaker off its US growth plans: Volkswagen AG is investing in its Tennessee factory and expanding its lineup of the sport utility vehicles that Americans love.

Volkswagen will likely pitch the Atlas five-seater alternately as a less expensive base model on the low end and a stylish, premium sport-ute "coupe" in higher trims. In addition to the two SUV variants, the plant builds the USA -market Passat midsize sedan, employing 2,800 people as of December 2016.

The move comes after VW global brand CEO Herbert Diess recently told reporters, according to The Wall Street Journal, that it's a "legitimate discussion" to consider why Europe has a 10% import tax on passenger cars while the U.S.is allowed to only impose a 2.5% tariff on cars from Europe.

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