Volkswagen Group CEO Martin Winterkorn has announced a multi-billion dollar investment programme in North America and confirmed that a new mid-size SUV for America is on its way and scheduled for 2016 market launch. 

"The Volkswagen Group is staying on course with qualitative growth," he said. 

Winterkorn said that the Volkswagen Passenger Cars brand is today better positioned in the US than ever before, adding that the production start of the new Golf "made in North America" would give the Volkswagen brand a further boost. "The new Golf features the latest generation of our TSI and Clean Diesel engines as well as electric drive and plug-in hybrid technology," he said. Production for the North American market begins this week at the plant in Puebla, Mexico, with the market launch scheduled for the summer.

Winterkorn said that VW will be investing over US$7m in North America over the next five years, confirming the new SUV as a part of that.

"Another element in the growth strategy is an attractive brand-new model designed specifically for North America," he said. "I'm delighted to confirm what so many have been waiting so long to hear: Volkswagen's mid-size SUV for America is on its way." He stated that development work on the seven-seater had already begun and that the US market launch was scheduled for 2016.

He added that the VW Group's plans remained unchanged. "We have set our goal: Volkswagen Group of America aims to sell 1m Volkswagen and Audi cars per year in the US by 2018. We are taking up the challenge - with confidence, total commitment and the necessary staying power. The group has almost doubled unit sales in the US since 2008, setting a new record of over 600,000 deliveries in 2013."

Winterkorn also commented that Audi had gone from record to record in the past 36 months and was now moving up another gear with models such as the Q3 and the A3 Sedan to be launched in the US this year as well as its own production plant in San José de Chiapa, Mexico. "And the Porsche legend in the US has never been stronger. Sales reached an all-time high of over 40,000 vehicles in 2013," Winterkorn added. 

Warwick Business School's Christian Stadler noted that if VW is to reach its goal to be global number one, it has to improve its performance in North America. However, he feels the goal for 2018 is ambitious.

"The target they have set to sell one million cars by 2018 is very ambitious. It means that they need to increase sales by 10% each year in the US. A tough goal when we condsider that the sale of the Volkswagen brand declined by seven per cent in 2013.

"Its luxury brands - Audi, Porsche and Bentley - are doing well, but in the US the name Volkswagen doesn't have the same reputation for quality and good value as it does in Europe. Most car buyers in the US would say Toyota has that reputation.

"Volkswagen's new Passat was released last year and was made for the US market, but Toyota and GM reacted by slashing prices on their equivalent cars which hit the Passat's sales and took the steam out of them."

However, he believes the new SUV could help VW.

"It is time for Volkswagen to fight back and a new mid-sized SUV will help. They will be helped with the US being a growth market, but this investment is welcome as it shows a shift in focus towards the US. They need to crack the US if they are to become number one in the world."