The Volkswagen Passat appears to be on the way out in North America. The sedan will be replaced by a new, US-produced mid-size car by 2011.

VW is considering the cancellation of the Volkswagen Passat line within two years.  The timing coincides with the anticipated 2011 release of the automakers' upcoming NMS (new mid-sized sedan).

The new sedan will be built in the Chattanooga, Tennessee, and should cost less than the current offering, despite being larger than the 4.8-meter long Passat.  In fact, the price cut could be more significant than expected.  A press agent for Volkswagen said, "We'll have two sedans coming out at the same time, and the smaller one will cost considerably more than the bigger one," according to Autoweek.

Speculation became more credible when VW Group of America CEO Stefan Jacoby took media questions earlier in October.  Pressed on the new vehicle plans, Jacoby said, "We are looking at it in detail."

European customers will continue to see the Passat in VW showrooms.  A new version should come on the market in 2011.

Autoweek is suggesting that the new sedan may cost nearly $8,000 less than the 2010 Passat sedan.  Passat pricing begins at $28,300, according to the VW website.

Volkswagen is choosing to build the new car in Tennessee to take advantage of the weak dollar.  The US dollar has lost nearly 15 percent of its value against the Euro since March 2009.  This translates to significantly higher American pricing for any vehicle built in Germany.

The company anticipates selling about 100,000 units of the new sedan every year.  Analysts may peg this as overly optimistic, considering current market conditions.  The company sold an incredibly low 9,200 Passat units in the first nine months of 2009, and only 30,000 models in the U.S. during 2008.  By comparison, the company sold 96,100 units in 2002.

Gallery: VW New Mid-Size Sedan to Replace, Not Join Passat in U.S.