Volkswagen Group of America, Inc.
announced today that it will build a U.S. automotive production facility in
Chattanooga, Tenn., where it will produce a car designed specifically for
the North American consumer and invest $1 billion in the economy. The
announcement is an important element of the company's overall U.S. strategy
of connecting with its customers, increasing its competitiveness and
tripling its U.S. customer base in the next decade.

    "The U.S. market is an important part of our volume strategy and we are
now very resolutely accessing that market," said Prof. Martin Winterkorn,
CEO of Volkswagen AG. "Volkswagen will be extremely active there. This
plant represents a milestone in Volkswagen's growth strategy. We will be
selling 800,000 Volkswagens in the U.S. by 2018, and this new site will
play a key role. This, along with our growth strategy, is a prerequisite
for the economic success of the company in the dollar region. We look
forward to establishing an important mainstay for ourselves when we become
the biggest European carmaker there."

    "This is a significant step forward in achieving our goals in the U.S.
market and a clear sign of the Volkswagen Group's commitment to the North
American consumer. Today's decision is a fundamental part of our new
strategic direction in the U.S. and our five-pillar strategy," said Stefan
Jacoby, President and CEO of Volkswagen Group of America. "Chattanooga is
an excellent fit for the Volkswagen culture, having an exceptional quality
of life and a long manufacturing tradition."

    The company will build the facility in the Enterprise South Industrial
Park, located 12 miles northeast of downtown Chattanooga. The 1,350-acre
site is 100 percent owned by the city of Chattanooga and Hamilton County
and is certified as an industrial megasite by the Tennessee Valley
Authority. Enterprise South is adjacent to Interstate 75. Initial
production capacity for the facility is anticipated to be 150,000 vehicles,
including a new midsize sedan designed specifically for the North American
market. Production is scheduled to begin in early 2011.

    "I'm enormously pleased by the announcement from Volkswagen Group of
America and grateful for the company's investment in Chattanooga and in the
people of Tennessee," said Tennessee Gov. Phil Bredesen. "I believe
Volkswagen chose Tennessee because of our shared values, our commitment to
innovation and our strong respect for the environment. This project will
have a significant impact on the economy of Tennessee and the region for
decades to come."

    "I couldn't be more pleased that the spirit of partnership between the
state of Tennessee, Volkswagen and the government and business leadership
of Chattanooga and Hamilton County has resulted in this significant
investment in Enterprise South," said Matt Kisber, commissioner of the
Tennessee Department of Economic and Community Development. "Volkswagen's
investment in this community means the hard work and dedication
demonstrated by people at the state and local level to create one of the
best business climates in the country is paying off."

    "We started with a vision of transforming an idle Army facility into
the source of thousands of family-wage jobs," said Hamilton County Mayor
Claude Ramsey. "Over the last 14 years, I've worked with four different
city mayors as well as county commissioners, city councilmen and countless
others in overcoming barriers and objections to that plan. Today, we stand
with our new friends from Volkswagen to make a historic announcement that
will create new opportunities for our community for years to come."

    "Volkswagen and Chattanooga have a lot in common," said Chattanooga
City Mayor Ron Littlefield. "Both are serious about environmental
sustainability and 21st Century manufacturing."

    Environmental responsibility is a core value of the Volkswagen Group.
The company's focus on sustainable mobility and environmentally responsible
manufacturing are right in line with Chattanooga's strong environmental
commitment. As an expression of this shared commitment, the state of
Tennessee, Volkswagen and Chattanooga-area organizations are partnering to
distribute two saplings for every tree displaced by the project. The new
trees will be planted by local school children.

    According to United States Sen. Bob Corker, who was mayor of
Chattanooga when the city and Hamilton County acquired the land and
established Enterprise South as an industrial park, the Volkswagen
announcement represents a new chapter in Chattanooga's success story.
"Through twists and turns, our community has maintained focus, invested
wisely and exercised tremendous effort and energy in recruiting a major
employer to Enterprise South. The breaking of this final barrier and the
realization of the vision to which we have held true will take us to levels
we can only begin to imagine," said Corker.

    He continued, "Volkswagen is the very best manufacturer and partner we
could possibly have in terms of our shared values, and as a result of their
enormous investment, not only will Chattanooga be forever changed, but our
entire state will reap great benefits from the new suppliers that this
facility will attract to the region. I am proud to have been part of a
dedicated team that has worked seamlessly on this effort and celebrate this
outstanding achievement for our city and our state."

    United States Sen. Lamar Alexander praised Volkswagen's decision to
locate at Enterprise South, saying, "Volkswagen and Chattanooga, the ideal
marriage: one of the world's most admired companies and one of America's
most livable cities. This decision keeps Tennessee on the road to becoming
the No. 1 state in auto jobs. Congratulations especially to Gov. Bredesen,
Sen. Corker and Mayors Ramsey and Littlefield for their leadership,"
Alexander concluded.

    "Over the past seven months, more than 100 Tennesseans at the local,
state and federal level have worked odd hours on short deadlines to help us
reach this day," said Trevor Hamilton, vice president of economic
development for the Chattanooga Area Chamber of Commerce. "From this day
forward, we dedicate ourselves to partnering with Volkswagen to move from
construction to production as quickly as possible. We will unify our team
with Volkwagen's to ensure long-term success for the company, our community
and the state of Tennessee."

    With the new plant, Volkswagen will bring about 2,000 direct jobs to
the area, and will add a significant number of jobs in related sectors. It
is expected that these jobs will come from the tri-state area, pulling from
the labor force of Tennessee as well as Georgia and Alabama. Volkswagen of
America received an attractive, comprehensive package of incentives for the
new facility from Gov. Bredesen's office and the Tennessee Department of
Economic and Community Development. The statutory incentives are tied to
job creation and capital investment. Additional support includes assistance
for public infrastructure and job training, each designed to ensure the
local economy best leverages Volkswagen's investment to benefit the local
work force and ensure the facility's success.

    "This area has a deep base of well-trained labor, with excellent
engineering and manufacturing programs at the universities and technical
colleges," added Jacoby. "Thanks to the visionary leaders and people of
Chattanooga, we're confident that the values of this area are compatible
with our own, and we envision a long and productive partnership."

    Last year, Volkswagen outlined a new strategic direction in the U.S.
based on five pillars: product, brand positioning, dealer network,
organization and local production. As it moved forward to assess the
potential for local production, the company considered many other site
options and earlier this year had narrowed its search to Alabama, Michigan
and Tennessee.

    "We reviewed three excellent sites, all of which had the specific
qualities necessary to build a plant in the United States," said Jacoby.
"Both Gov. Granholm and Gov. Riley were strong advocates on behalf of their
states and the citizens they represent. This was a difficult decision, but
we look forward to continuing our relationships with both states. I thank
both governors and their staffs."

    About Volkswagen Group of America, Inc.

    Volkswagen Group of America, Inc. is a wholly-owned subsidiary of
Volkswagen AG, the world's fourth largest automaker and the largest
carmaker in Europe. It houses the U.S. operations of a worldwide family of
distinguished and exciting brands including Audi, Bentley, Bugatti,
Lamborghini and Volkswagen, as well as VW Credit, Inc. Founded in 1955, the
company's headquarters are in Herndon, Va.

    Volkswagen Group of America brings to the U.S. vehicles that marry the
science of engineering and the art of styling, with the goal of offering
attractive, safe, and environmentally sound automobiles that are
competitive and set world standards in their respective classes.

    The company has approximately 2,500 employees in the United States and
sells its vehicles through an 800-strong dealer network. With increasing
popularity for its brands in the U.S., the company has set the goal of
reaching one million car sales in the country by 2018.

    For more information, visit http://www.volkswagengroupamerica.com .

    About Volkswagen of America, Inc.

    Volkswagen of America, Inc. is the brand organization of the Volkswagen
Group of America that markets Volkswagen vehicles in the U.S. The company
recently announced Electronic Stability Program (ESP) as standard equipment
on all its 2009 vehicles. As a result, Volkswagen is one of the only
original equipment manufacturers to offer an electronic stability control
system on their entire product line - ahead of the National Highway Traffic
Safety Administration's (NHTSA) deadline requiring vehicles in the 2012
model year to include stability control systems. Volkswagen's ESP
technology works in conjunction with anti-lock brakes and helps reduce loss
of control and rollovers to avoid crashes. NHTSA predicts nearly 10,000
lives could be saved each year if automakers included stability systems as
standard equipment.

    Founded in 1955, Volkswagen of America, Inc. is headquartered in
Herndon, Va. It is a subsidiary of Volkswagen AG, headquartered in
Wolfsburg, Germany. Volkswagen is one of the world's largest producers of
passenger cars and Europe's largest automaker. Volkswagen sells the Rabbit,
New Beetle, New Beetle convertible, GTI, Jetta, GLI, Passat, Passat Wagen,
Eos, Tiguan and Touareg through approximately 600 independent U.S. dealers.
Visit Volkswagen of America online at vw.com .

    About The Tennessee Department of Economic and Community Development

    The Tennessee Department of Economic and Community Development (ECD) is
the primary job recruitment and retention agency for the state of Tennessee
with responsibility for the FastTrack Infrastructure Development and
FastTrack Job Training Assistance programs as well as the development of
energy policy. ECD's mission is to attract new investment to Tennessee and
to help existing industries expand. Since 2003, more than 145,000 new jobs
have been created in Tennessee as a result of ECD programs with more than
$21 billion in new capital investment. In March 2008, Tennessee was named
winner of Site Selection magazine's national Competitiveness Award, ranking
first among all 50 states for business climate. For more information, go to
http://www.tnecd.gov .

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