Wolfsburg, Germany-based automotive manufacturer Volkswagen AG has selected Chattanooga, Tenn., to build its next U.S. assembly plant, providing job growth that could spill over into nearby north Georgia.

About 2,000 people are to be employed at the $1 billion plant when it is completed in 2011.

Volkswagen’s advisory board picked the southern Tennessee city out of 25 sites due to its transportation network and proximity of parts suppliers, according to a company statement.

Kristian Wolf, CEO of the Atlanta-based German American Chamber of Commerce of the Southern U.S., told GlobalAtlanta that many German Volkswagen suppliers could establish a presence near the plant.

“They will have to be within a very short drive of the facility, that could put some of the suppliers into areas like Rome and certainly Dalton,” he said.  “Northwest Georgia is probably going to reap the most benefit from that.”

Georgia is already seeing the effects of multiple automobile suppliers locating in the state after Kia Motors Corp. of Seoul, South Korea, announced it will build a plant in West Point.

Martin Winterkorn, Volkswagen’s CEO, said that the new plant is part of the company’s plan to keep pace with growing demand.

“We will be selling 800,000 Volkswagens in the U.S.A. by 2018, and this new site will play a key role,” he said.