FRANKFURT, Germany — Volkswagen AG has picked Chattanooga, Tenn., over sites in two other states for its new U.S. auto plant, a board member of Europe’s biggest automaker said today.

Sites in Alabama and Michigan were also considered for the plant, which is part of Volkwagen’s strategy to increase its presence in America. Volkswagen closed its last U.S. production facility in 1988.

Christian Wulff, the governor of Lower Saxony and a member of VW’s supervisory board, told The Associated Press that the company picked Chattanooga after the board debated the merits of the location and its benefits.

Details on the plant, including how many workers it would employ, when it would be completed and what model of cars that may be produced there was not immediately released.

The company holds only a 2 percent share of the U.S. market. VW officials have said the company intends to more than triple its U.S. sales to 1 million by 2018.

The German state of Lower Saxony owns more than 20 percent of Volkswagen.

He said that the new plant in the U.S., in addition to its factories in India and Russia, is part of the company’s strategy to become the world’s number two automaker.

The automaker has said the surging euro has pushed along plans for a new production facility. The 15-nation currency hit a record high of $1.6038 on Tuesday, making goods exported from Germany more expensive in the United States.

Shares of Volkswagen, whose brands include VW, Audi, Skoda, Bentley, Bugatti and Seat, were steady at 169.78 euros ($271.48) after the decision.