Volkswagen (VW) has chosen Chattanooga, Tennessee, as the location for its new manufacturing facility. The decision is likely to provide $1 billion (£498 million) into the local economy.
The site was selected in preference to locations in Michigan and Alabama.
VW made the decision to expand its US manufacturing due to the rising value of the euro against the dollar, which has made manufacturing in Europe and exporting to the US increasingly expensive.
The news has been welcomed by the troubled US automotive industry, which has been suffering in the current economic climate.