If Volkswagen chairman Ferdinand Piech and his protégé, CEO Martin Winterkorn, hope to consolidate VW’s position as the world’s largest automaker by 2018, American consumers will need to buy a lot more new Volkswagens, Audis and Porsches.
Despite an increase in sales on the strength of the redesigned [locally made] Passat and Mexican Jetta sedans, Volkswagen Group has “underperformed” in the United States compared with the group’s other major markets, according to US communications chief Tony Cervone.
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But analysts say that trajectory is rising in the country as the company moves out of its niche role “as a purveyor of expensive, German-engineered cars”.
Much of its recent success is attributed to the new Jetta and Passat, both of which were specifically tailored to better suit mainstream US consumers and re-engineered to be built at a much lower cost than their predecessors.
The Jetta is assembled at VW’s Puebla factory in Mexico and the Passat was the first car to roll off the line at the new US$1bn Chattanooga, Tennessee, plant that opened last year.
Cervone told Reuters: “We now have products that are German-engineered but are more affordable. But we have to have more core products.”
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By GlobalDataVW Group sales in the first six months of this year – including those of Porsche – climbed 29% to 290,333. That puts VW on pace to reach 575,000 units for the full year – just over halfway to chief executive MartinWinterkorn’s goal of 1m annual US sales by 2018.
By then, VW wants to sell 800,000 VW-brand and 200,000 Audi-brand vehicles in the market. But US sales are still well behind those in such countries as China, where VW has been the leader for more than two decades and still accounts for one of every six new vehicles sold. Last year, VW Group sales in China totalled 2.6m units – 27% of the company’s global sales of 8.27m.
In comparison, the US market accounted for just 5% of the group’s worldwide total. To do that, VW wants to boost the Chattanooga plant’s annual production capacity to 500,000 units while adding several new models to the US mix, including a lower-priced successor to the Tiguan and a larger, seven-passenger crossover.
Analysts also said that VW has to broaden its US sales network and convince dealers that it is not a lower-volume, boutique manufacturer.
