Volkswagen AG will build its first United States assembly plant in Chattanooga, officials said today.

Europe’s biggest automaker said it will put a nearly $1 billion investment in Chattanooga’s Enterprise South Industrial Park.

The new plant is expected to eventually create 2,000 jobs. The plant is expected to open in 2011.

“The U.S. market is an important part of our volume strategy and we are now very resolutely accessing that market,” said Martin Winterkorn, chief executive of Volkswagen.

Volkswagen officials said the surging euro has pushed plans for a production facility forward. The 15-nation currency has been hitting record highs in recent weeks against the U.S. dollar, making goods exported from Germany more expensive in the United States.

Volkswagen recently moved its North American headquarters from suburban Detroit to Herndon, Va., outside Washington, to bring it closer to its East Coast customer base.

Volkswagen produces VW cars and trucks and also makes vehicles under the Audi, Skoda, Seat, Lamborghini, Bentley and Bugatti names.

Erich Merkle, vice president of forecasting auto industry forecaster IRN Inc., said it’s not just the VW plant that will boost the economy.

He said there are eight to 10 jobs outside the plant that will be created. Suppliers will build plants to support the assembly facility, he said.

Also, there will be hotels and restaurants built to support those, Mr. Merkle said.

“It’s like casting a stone in the pond,” he said.

Volkswagen AG is headed to Tennessee to build cars in the U.S. after picking the southern state as the site for its new plant.

Chattanooga beat out bids by Alabama and Michigan for the new plant, which is part of the Wolfsburg-based company's strategy to increase its presence in America.

The announcement came today from Lower Saxony Minister President Christian Wulff, who sits on the supervisory board of Europe's largest automaker.

See tomorrow’s Chattanooga Times Free Press for complete coverage.