VW gives CrossBlue the green light

VOLKSWAGEN has confirmed it will produce an all-important future seven-seat SUV at its Chattanooga, Tennessee plant from 2016, but right-hand drive production is still up in the air.

The German car-maker announced that a new addition to its expanding SUV line-up would be based on the CrossBlue concept that was revealed at the 2013 Detroit motor show, and would sit above the compact Tiguan but below the larger Touareg.

A production version of the seven-seater SUV as been anticipated since its motor show debut, and while right-hand drive production is not yet confirmed, Volkswagen Group Australia has expressed interest in a seven-seat SUV.

Volkswagen Group Australia general manager of communications Karl Gehling told GoAuto that the German car-maker's local arm had its hand up for the seven-seater, but said there was no word on right-hand drive production at this stage.

“We have indicated interest if there were to be right-hand drive (RDH) production. But until that changes, we will watch with interest. It is something that we need to be right-hand drive production to make it even relevant to us.”

Mr Gehling said there was room in the local line-up for a new mid-size family-friendly SUV to sit below the Touareg, but that the company would have to wait on a decision from its German headquarters.

“We obviously see demand here in Australia for the size of vehicle, but we can't utilise that at the moment.” Volkswagen Group Australia managing director John White told GoAuto in April this year that it was targeting a greater market share in Australia, and that a number of key new models, including a Toyota Kluger fighter, would boost its chances.

“I think that whether it’s top four, five or six, we do want to be a higher-volume player, a top-tier volume player, but to do that we need to improve customer satisfaction, we need to move into segments we aren't in right now such as small SUV, a larger next-generation Tiguan, a seven-seat SUV … so there are certain product gaps we need to fill,” he said at the time.

Volkswagen has given little away about the SUV at this stage, including whether it will keep the CrossBlue moniker from the concept, or if it will choose a new name when it rolls off the US production lines in late 2016.

The Chattanooga, Tennessee plant will be expanded to accommodate the additional production facilities required, and the addition of the SUV will create 2000 new jobs in the southern state.

Approximately $US900 million will be invested in the production of the SUV, with $US600 million of this going directly to Tennessee.

A new research and development planning centre has also been confirmed at the Chattanooga site, which will focus on the needs of the US market, and will create about 200 engineering jobs.

The company estimates that between 2014 and 2018 it will invest more than $US7 billion in the US and Mexico, where it builds the Golf-based Jetta sedan and the Beetle hatch, and plans to sell 800,000 vehicles in America by 2018.

Volkswagen Group of America president and CEO Michael Horn said the new SUV will be a welcome addition to the company's US line-up.

"The Chattanooga-built midsize SUV will allow us to fulfill the wishes of our dealer network, bringing new customers to our showrooms and additional growth for the brand," he said.

"We are eager to be entering this growing vehicle segment with a world-class, seven-passenger SUV from Volkswagen."Currently, Volkswagen Australia offers the Tiguan crossover, which is based on the same platform as the previous-generation Golf, from $28,490, plus on-road costs, while the full-size Touareg kicks off from $63,990,So far this year, Volkswagen SUV sales are up by 7.7 per cent to 5084 units compared with the same period last year when it had sold 4722. The Tiguan makes up the bulk of that number with 3679 sold to the end of June this year, while 863 Touaregs have found homes in that time.

The jacked-up Passat Alltrack, which is also considered an SUV, has shifted 542 units in the first six months of 2014.