Volkswagen Groups Sticks to its Sales Goal for 2018

By Henny Hemmes
Senior European Editor
The Auto Channel

DETROIT, January 15, 2013. In the hay days of the Beetle, Volkswagen was the largest foreign brand in North America. But after the arrival of the Japanese brands, the Germans had to deal with quality problems, which were published widely in the media, and VW had not been profitable for decades, because of the exchange rates of the dollar and a market share of only 2 percent.

Several years ago, it became obvious that Volkswagen was determined to reclaim the lost ground. With the presentation of ' Strategy 2018 ' the objectives of the Volkswagen Group were presented. Part of the plan was the rather ambitious goal to sell one million cars in North America in 2018.

In 2012, Audi, Porsche and VW together sold just below 600,000 cars in North America. One of the reasons for this 34.2 per cent increase is the addition of the favorably priced Passat to the model range.

Just like the German and Japanese competitors, VW decided to build a plant on American soil. This plant was opened in May 2011 in Chattanooga, Tennessee (investment 1 billion dollaer). By building the Passat there, it could be priced some seven thousand dollars lower than the model imported from Germany.

Hence, last year, over 117,000 American built Passats have been sold. With a total sales increase in the US of 31 per cent in 2012, Project 2018 looks more realistic than many had thought at the time of the presentation.

Recently, production of the Passat in Chattanooga has been increased by adding a third team to the two shifts, which brings the employment number from 3000 to 3,300. While in 2012, some 130,000 cars have been built, this year that number will be raised to 150,000.

After a press conference at the eve of the auto show in Detroit, I asked Jonathan Browning, President and CEO of the Volkswagen Group of America, if the plant will be reaching its maximum capacity this year.

“No, the next step will be the use of more equipment and employing more people. That way, we can build 200,000 units a year..”

To match the sales numbers of the Japanese and now also the Korean brands, VW is fully aware that all the stops have to be pulled out. That is why, especially for the American market a 3 row midsize SUV that debuted here in Detroit yesterday named the CrossBlue Concept. The CrossBlue is a plug-in diesel-electric hybrid system first shown in the Cross Coupe concept, and expected to see production by the middle of the decade. Both combine the latest evolution of Volkswagen’s 2.0-litre four-cylinder common rail diesel engine plus two brushless electric motors. This new model is hoped to become the desire of sioccer moms throughout North America. Giving VW a model in the fastest growing segment in the US, while they also will be represented in four of the five most important segments of the American market.

Last year, the Volkswagen Group as a whole has shown an excellent performance with 9.07 million units sold (+11.2 percent). Chairman Prof. Dr. Martin Winterkorn: "We have done very well under difficult conditions. 2012 was the best year ever and that's a big step forward in our Strategy 2018. But there are still major challenges."

On the European market, the Group’s sales were stable with 0.3 per cent fewer cars sold compared to the previous year, in spite of the difficulties in southern Europe. Dr. Winterkorn: “The United States is one of the Volkswagen Group’s key markets for implementing our Strategy 2018. Volkswagen Group of America will continue to grow, and, together with Porsche Cars North America, will deliver well in excess of 600,000 vehicles to customers this year.”