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May 13, 2009

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Volkswagen factory in Chattanooga foundation for future US strategy

Ceremony officially marks beginning of construction work

The Governor of the State of Tennessee, Phil Bredesen, and Professor Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen AG with responsibility for ‘Group Production’, will be joined today, Thursday (2.00 p.m. local time), by invited guests to celebrate the erection of the first wall at the new US factory in Chattanooga, Tennessee. The plant represents a major milestone for the Volkswagen Group in attaining its ambitious growth targets for the North American market.

Production in Chattanooga will commence in 2011 with a maximum annual capacity of 150,000 vehicles. Over the coming months, modern, environmentally-friendly buildings housing a body shop, paint shop, assembly and offices will be built on the site which covers approximately 6.4 km2.

Volkswagen Group of America will invest one billion dollars in the plant and employ 2,000 people. The Chattanooga factory will build a new mid size sedan specially designed for the North American market. Approximately 30 percent of these cars will be powered by Volkswagen’s TDI Clean Diesel Technology.

“This is a big day in our company’s history. Today, we are putting down new roots in the United States of America. And we are entering a long-term partnership with this community, this state and this country,” said Frank Fischer, Chairman and CEO of Volkswagen Group of America Chattanooga Operations, LLC.

With the construction of the Chattanooga factory, Volkswagen is also assuming special responsibility for the environment. Apart from energy-saving ventilation systems which compensate for fluctuations in outside temperature, the production halls will also feature efficient industrial lighting systems with reflectors. Furthermore, Volkswagen has given an undertaking to plant a seedling for every tree felled to make way for the plant.

First columns of the new paint shop

Moreover, Volkswagen is making a commitment to the people in the region. At the end of March, Volkswagen already announced it would be participating in the “Partners in Education” program, contributing some 5.3 million dollars over a five-year period. The partners are regional universities as well as vocational training institutions and local schools.

In 2008, the Volkswagen Group produced 6.347 million vehicles worldwide, some 66.2 percent of which (4.201 million vehicles) were built outside Germany. The Chattanooga factory will be the 62nd facility in the production network of the Group with its nine brands.

Fischer (l) and Heizmann in front of the site

The goal of the Volkswagen Group is to triple sales in the USA by 2018 under its growth strategy. This strategy is based on the five pillars of product strategy, brand strategy, dealer network, organization and local production. The new strategic orientation coincided with the relocation of the Volkswagen Group of America headquarters to Herndon, Virginia, in early 2008. In spite of the market downturn, Volkswagen grew market share in the first four months of the year by 43 percent.

(May 14, 2009)

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