VW looking to develop products better aligned with US consumer demands

Volkswagen (VW) is opening its North American Engineering and Planning Center near its plant in Chattanooga, Tennessee, United States. Plans for the facility were announced in mid-2014, as part of the USD900 million expansion of the Chattanooga plant. In a press release announcing its opening and Dr Matthias Erb's appointment to run the centre, VW said it "centralizes Volkswagen's research and development, and product planning efforts in the American South. This new entity joins the production, purchasing and sales efforts currently operating in the North American Region." VW will leverage the facility as a high-level research and development resource; it will include product engineering, innovation management and product management. Erb addressed the new centre in remarks at the recent management briefing seminars in Traverse City, Michigan, saying, "It is one of the cornerstones for what we are doing in North America… It makes sense to develop a car in the region where you sell it. We also need to localize more parts in the car." By the end of 2015, Erb told the Detroit News, the temporary facility could house 100 engineers and 30 product development staff, growing to 200 engineers by the end of 2016. Erb is looking for VW to also approve a new building, a test track and crash-testing capability. Erb also acknowledged that the location may make hiring somewhat more difficult than if the facility were in northern state, more near other engineering resources.

Significance: VW is looking to develop products better aligned with US consumer demands, and it will be responsible for developing US-specific model variations. VW is also looking for the investment to help reduce time to market, keep pricing competitive and shorten product lifecycles from seven years to five. While a permanent facility is constructed, the team is located in an interim facility about two miles from the plant. The new facility does not impact the functions housed in Auburn Hills, Michigan, where VW runs emissions testing and safety affairs, or the infotainment system development in California, Erb said.

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