CHATTANOOGA, Tenn. (AP) - German automaker has begun construction at its Chattanooga plant for an extension of its assembly parts shop warehouse.

The extension will triple the warehouse capacity to more than 300,000 square feet. It is expected to be completed by August. The on-site expansion will eliminate the need for two external staging warehouse.

The project will cost about $18 million dollars and add 14 dock doors for parts delivery, with an option to adding 20 more in the future.

Volkswagen says the expansion is entirely aimed at production of the Passat sedan, which the plant produces for markets in the United States, Canada, Mexico, South Korea and Middle Eastern countries.

The Chattanooga plant is also competing with Mexican sites for the production of a new Volkswagen SUV.