German auto giant Volkswagen said Monday it will invest $900 million (643 million euros) to build a new sports utility vehicle (SUV) in Chattanooga, Tennessee from 2016.
"The Volkswagen group is expanding its industrial footprint in the US," the carmaker said in a statement.
"The board of directors has decided to award the production of the new midsize SUV to the Chattanooga plant in Tennessee. The group will be investing a total of approximately $900 million in the production of a newly developed, seven-passenger SUV, and creating 2,000 additional jobs in the US," the statement said.
The new car is to begin rolling off assembly lines in 2016, it added.
Chief executive Martin Winterkorn reiterated VW's target to sell 800,000 cars in the US by 2018.