The  Scout Motors project, which would employ up to 4000 people, could also receive up to $US180 million ($A255m) in job development tax credits based on hiring, said a report by Reuters.

Volkswagen said in 2022 that it planned to reintroduce the Scout brand into the US with EV ute and SUV models priced from $US40,000 ($A62,000) and that it was aiming at production volume of 200,000 units a year.

The new Scout will be built on a unique platform and use components from the Volkswagen Group. The design is to be based on the International Harvester Scout SUV produced from 1961 to 1980.

Volkswagen’s commercial vehicle subsidiary Traton acquired the Scout name when it bought International Harvester’s successor company, Navistar, in 2020. 

Scout and Travelall vehicles made by IH were forerunners to the popular SUVs from Detroit’s ‘big three’ car-makers such as the Ford Bronco and Chevrolet Suburban.

IH was previously known for its tractors and commercial vehicles, including the Scout that was the first 4WD rival to the wartime Willys Jeep.

The proposed factory in Columbia, South Carolina, will start construction this year and Scout production is expected by the end of 2026.

Scout CEO Scott Keogh said at a media event to outline the plans that his company looked at 74 sites “in a dozen states” before deciding on South Carolina.

“The site was ready, the governor himself put together an EV council … to make sure his state was ready.”

Volkswagen is the latest automotive company to announce it will build factories in South Carolina. The state is home to BMW’s US operations at Spartanburg – where the Australian-bound X5 models are made – and has the brand’s largest factory by volume. 

At Spartanburg, BMW and battery maker Envision are preparing to build a battery plant and expand production facilities to make at least six new EV models by 2030.

South Carolina also has more than 500 automotive-related companies and 75,000 automotive industry employees.

The plan for a new SUV and ute line isn’t unexpected. Volkswagen has moved away from cars in the US with SUVs now accounting for about 80 per cent of US sales of the group’s Volkswagen and Audi brands. 

Volkswagen last sold a ute – a Golf-based Rabbit pickup – in the US in the early 1980s.

By Neil Dowling