Volkswagen has begun building its 2018 Atlas mid-size SUV in Chattanooga, Tenn., ahead of the vehicle's introduction in 2017, the company announced.

Volkswagen is entering a highly competitive category with the three-row Atlas, which will likely replace the Touareg luxury SUV. It's expected to arrive at dealer lots in the spring.

"The challenge of integrating a new vehicle line while simultaneously completing a major expansion of our facility was daunting, but our team stepped up to the task and now we have taken another step towards the market introduction of the Atlas," said Christian Koch, president and CEO of Volkswagen Chattanooga.

The 2018 Atlas will be offered in five trim grades. Buyers have a choice of two engines, including the standard 2.0L turbocharged, direct-injection TSI four-cylinder that makes 238 hp and optional 3.6L VR6 six-cylinder that makes 280 hp.