Chattanooga Volkswagen Plant Reaches 200,000 Atlas Cross Sport SUVs Amid Recall and Sales Growth Challenges

Chattanooga Celebrates Big Volkswagen Production Milestone

CHATTANOOGA, TN – Exciting news rings out from the Volkswagen plant right here in Chattanooga! This week, the plant has officially produced its 200,000th Atlas Cross Sport SUV, a major milestone for the facility and a testament to its growing success. Pablo Di Si, the chief executive of Volkswagen Group of America, shared this achievement with pride, stating that these vehicles have been a vital part of Volkswagen’s expansion in the U.S. market.

Growth Amidst Recall Troubles

However, it hasn’t all been smooth sailing at the Chattanooga plant. Volkswagen recently announced a recall affecting more than 1,400 of the 2024 Atlas and Atlas Cross Sports. This recall is due to a brake cylinder issue that was traced back to a supplier. An incorrect secondary piston spring retainer may have been installed, which could lead to reduced brake performance—a serious concern that could increase the risk of accidents. The National Highway Traffic Safety Administration has been closely monitoring this situation.

Despite these hiccups, there are bright spots in the sales figures. Di Si mentioned that sales of the Atlas Cross Sport are up by 6% in the third quarter of 2024 compared to the same time last year. The parent Atlas SUV, which has been in showrooms since 2017, saw an even more impressive increase of 16%.

Overall Sales Surge

Across the board, Volkswagen of America experienced a 6% increase in total sales during the third quarter, with 93,271 vehicles sold. Specific models showed very positive trends as well; for instance, the compact Jetta surged by a remarkable 35%, and the versatile Tiguan SUV saw a healthy growth of 26%. These figures illustrate the favorable direction in which Volkswagen is headed, especially with their refreshed Atlas family of SUVs.

Challenges in the EV Sector

On a less rosy note, the Chattanooga-made ID.4 electric SUV experienced a sharp decline in sales, dropping by a staggering 58% in the same quarter. This downturn mirrors broader trends in the electric vehicle (EV) market which are currently facing a slowdown. Adding to these concerns, production of the ID.4 will be temporarily halted due to issues with door handles, which have also led to a recall affecting approximately 98,000 units.

During this pause in production, around 200 employees will be temporarily furloughed until the ID.4 assembly resumes. It’s a tough situation for those workers, but Volkswagen is optimistic about getting back on track as soon as possible. Di Si noted that the plant, having started its operations in 2011, is still quite young by the company’s standards. He looks forward to the day when the community will see second-generation workers employed at the plant.

A Global Perspective on Performance

Volkswagen Group, which oversees VW, Porsche, Audi, and other brands, recently shared some more sobering news: a 7% drop in global deliveries in the third quarter compared to last year. Most notably, deliveries in China tumbled by 15%, raising concerns over the automotive giant’s competitiveness in key markets. As global EV sales slow, and with weakened demand in Europe, the future may pose challenges.

These developments highlight both the potential and the obstacles ahead for Volkswagen. In Chattanooga, the plant is still hard at work, aiming to climb above these bumps on the road. As we look further ahead, it will be interesting to see how these trends unfold and affect our local economy.