Volkswagen America president Stefan Jacoby said Wednesday in Chattanooga that the current economic downturn could last through next year, but he said VW "is not backing down" on its $1 billion local investment at the Enterprise South Industrial Park.

Giving the keynote address at the Chamber of Commerce's Kruesi Spirit of Innovation luncheon, Mr. Jacoby said, "If we don't invest now, we destroy yours and ours" future opportunities.

The speaker said with auto sales down worldwide, Volkswagen is seeking to optimize its expenses, "but we are not backing down one inch" on the Chattanooga investment. He added, "We believe it will pay off for our company and for Chattanooga."

He said VW plans to be rolling 150,000 sedans off the lines at the Chattanooga facility "in a couple of years."

He said the design of the sedan is currently in the final stages.

Mr. Jacoby said the company hopes to up that number to 300,000 a year as it aims for its goal of producing a million VWs and Audis a year in the U.S. by 2018.

He said the 1,200 guests at the Convention Center that Chattanooga was chosen for the plant primarily "because of the forward-looking attitude in the region."

He added, "We were guided by objective criteria, but it also felt right. Standing here today, I am more than ever convinced that we made the right choice."

Mr. Jacoby said having the automaker here "will help solidify Chattanooga's growing reputation as a center of innovation."

He said, "You can almost feel the momentum that is propelling the future here."

He stated, "It is no secret that these are challenging times." He said VW expects to fall below the sale of 10 million vehicles for the first time since 1983. But he said the company's market share has been growing.

"We are ready to take off when the economy improves - and it will," he said.

Mr. Jacoby said steps are constantly being made to make the automobile more fuel efficient and cleaner. "We are re-inventing the automobile," he said.

He said VW is proceeding with a two-pronged approach - working to improve the gasoline and diesel vehicle and also seeking to develop an array of alternative vehicles.

"Our goal is a zero emissions vehicle," he said.

He predicted there will be many cars on the roads in the next 10 years that will get 60, 70 or 80 miles per gallon.

The speaker said he supports an idea to give U.S. consumers vouchers toward the purchase of a new car to replace an old inefficient, polluting one.

Stefan Jacoby
- Photo2 by Brent McDonald (See video on Channel 9)