According to sources close to VW’s management team claim that Huntsville, Alabama came out on top to be the location that facilitates VW’s newest planned extension in U.S. production.

Chattanaooga, Tenn. offered more incentives, however was not able to meet the deadlines for development set forth by VW. The development will commence in 2010 and will be to the tune of $788 million.

This is the latest piece of the puzzle to ensure stable supply to VW’s expansion plans, which include sales of 800,000 VW’s and 200,000 Audi’s by 2018. The new plant will have an output of 300,000 units annually.

Sources high on the VW corporate ladder told the Associated Press, that it is more then likely that Alabama will serve as the state where VW is building it’s new plant. Scheduled to begin construction in 2010, it is expect to have an output of 300,000 cars annually.

The other state considered for the investment was Tennessee. Michigan has been dropped from the probable locations.

VW is expected to build it’s VW Tiguan, Q5 Audi, VW Jetta or another full sized VW at the plant. Full output is to be achieved by 2018