Volkswagen AG will announce plans to invest $340 million to manufacture a new sport utility vehicle at its Chattanooga, Tenn., plant to meet the growing demand of larger vehicles, Reuters reported, citing a person briefed on the announcement.

Volkswagen Group of America CEO Hinrich Woebcken told reporters in 2017 that the automaker planned to build a five-seat SUV in Tennessee, though he declined to give a start of production date.