VW Said to Favor Tennessee Factory to Build New U.S. SUV

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Volkswagen AG, Europe’s largest carmaker, will add a mid-sized sport-utility vehicle in the U.S. and probably produce it in Chattanooga, Tennessee, two people familiar with the matter said.

The Chattanooga factory is favored over VW’s plant in Puebla, Mexico, to build the SUV for North American customers, said the people, who asked not to be identified speaking in advance of an official announcement. Any decision will be part of a wider move to sell the model in other markets, such as the Middle East or China, though the version sold in that country would probably be produced locally, one person said.