While Detroit auto makers are suffering from a lack of confidence, VW and KIA are planning new plants in the South. VW is planning a $1 Billion plant in Chattanooga, Tenn. The plant will produce mid-size sedans and employee some 2,000 workers. Over at KIA they plan to build a new sport utility vehicle in West Point, GA. and will employee some 2,500 workers.

According to an article at SF Gate it also states:

Optimism surrounding both projects seems a world away from Detroit, where GM and Chrysler are struggling to survive and tens of thousands of auto workers are losing their jobs.

Auto industry analyst Erich Merkle in Grand Rapids, Mich., said there is plenty of reason for Volkswagen and Kia to be excited. “Somebody has to pick up the market share that Chrysler and GM are going to lose,” he said.

“They can benefit greatly from having a plant here, especially when some of competitors have been washed out.”

While Chrysler and GM are teetering, foreign automakers competing for buyers in the U.S. are also squeezed with many analysts predicting just 10 million vehicles will be sold this year, almost 6 million fewer than in 2007.

So it seems that VW, KIA and other automakers have discovered that building cars outside of Detroit can be profitable once the economy turns arounds. Maybe GM and Chrysler should make the switch as well.

What do you think?

Comments welcome.