Volkswagen’s plans to build and open a plant in Chattanooga, Tennessee, by 2011 have not been put on hold, according to a company executive.

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Frank Fischer, CEO of the company’s Chattanooga operations, told Reuters there were no plans to delay the factory due to difficult economic conditions.


“It’s the best time to do it now and not to postpone it,” he said in an interview.


He added he expected the car market to pick up by then so a delay in building the plant could otherwise jeopardise supply.


The plant is scheduled to build a new model unique to North America.

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In March, Volkswagen’s American chief said he thought US auto sales this year could come in under 10m units if consumer demand does not recover.


Volkswagen Group of America president and CEO Stefan Jacoby said he predicted overall 2009 unit volumes off 25% year on year to around 10m vehicles.


Jacoby said the timing of such a recovery was up in the air and might not happen until the end of 2009 or in 2010.


He added that the Chattanooga plant planned to get 80% of its supplies from North America. If the US parts industry was disrupted, VW would buy from Mexico.