Volkswagen announced that a cheaper replacement for the Volkswagen Passat developed primarily for the United States will likely be built in a US plant next to an eventual Jetta replacement.

Volkswagen wants to increase US sales to 1 million by 2018: 800,000 VW vehicles and 200,000 Audis, so making a one or both cars in the dollar zone with U.S. components is crucial.

The plant would begin production in late 2010 with a capacity of 200,000 to 250,000 vehicles. Volkswagen is considering adding to the factory a new mid-sized SUV, also under development.

The new SUV will be placed between the Tiguan and the Touareg.

The Passat replacement would cost about $20,000, considerably less than the nearly $25,000 with shipping for today’s model. The car would be bigger to compete with the Toyota Camry.

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Source: Automotive News

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