As if Detroit needed any more bad news, there are reports that yet another foreign producer of sensible, efficient and fun to drive cars is planning a raid on the domestic market share of the SUV-producing giants. Apparently Germany's Volkswagen (OTC: VLKAY) is considering building a new plant in Alabama to produce Jettas and next-generation Passat sedans, and possibly a small new SUV called the Tiguan, as well as the Audi A5. The plant will cost an estimated $788 million and employ several thousand workers. No decision was made about the plant's location at a meeting on Wednesday by Volkswagen's management board, and VW is reportedly also considering sites in Tennessee and Michigan.
This would not be the first time VW produced cars in the U.S. From 1978 to 1988, the company produced over a million vehicles, mostly Rabbits, in New Stanton, Pa., near Pittsburgh. But VW's quality and reputation suffered in the 1980s, and the company now has less than 2% of the American market. However, VW is making a great comeback across the globe, and senior managers must think the time is right to start selling more cars in the massive North American market, the world's largest.
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