published Wednesday, September 1st, 2010

New sedan, Jetta to share parts

Standardization brings savings to VW

  • photo
    Contributed photo The Volkswagen plant's body shop is nearly complete and ready for production.

The new midsize sedan Volkswagen will make in Chattanooga will share about a third of its parts with the Mexican-made Jetta, according to the automaker.

Quality and cost savings are two reasons cited by the company for the sharing of components.

Thomas Loafman, Volkswagen Group of America’s director of purchasing, said sharing about a third of the compact Jetta’s components will help the quality of the midsize sedan as the parts are already designed and perfected.

The Chattanooga vehicle “has to achieve the highest level of quality right from the start,” Loafman said. “Quality is No. 1.”

Frank Fischer, chief executive of VW’s Chattanooga operations, added that sharing parts achieves an economies of scale.

“You don’t have to design and test them,” he said.

Jeannine Fallon, an analyst for the auto website, said that having vehicles share components is a cheaper way for an automaker to do business.

“It’s about efficiency,” she said.

The cost of the 2011 redesigned Jetta carries a starting manufacturer's suggested retail price, including destination charge, of $16,765 with manual transmission and 115-horsepower, 2-liter, four-cylinder engine, according to The Associated Press.

The base model price tag is much cheaper than the starting retail price of more than $19,000 for last year's model, which came with a bigger, more powerful engine, the AP said.

The price of the redesigned Jetta’s puts it more in line with competitors such as the Toyota Corolla and Honda Civic.

The new midsize sedan, as yet unnamed, is expected to start at about $20,000, a price that will help it compete against its competitors.

The price tag of this year’s imported VW Passat, which the new car is expected to replace in the United States, is higher than the projected entry-level cost of the Chattanooga sedan.

VW officials said that more than 85 percent of the new sedan’s parts are sourced from North America. That, too, is a savings from having to import components from Europe.

“We put a very, very high focus on sourcing in the U.S. dollar region,” Fischer said.

VW is expected to encourage more suppliers to locate facilities even closer to its Chattanooga plant as years go by. One auto consultant suggested last week VW will spur additional suppliers to shift production nearby within five to 10 years to aid in transportation and quality.

VW’s $1 billion Chattanooga assembly plant is to start production early in 2011 and employ over 2,000 people when fully ramped up.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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