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 VW is aiming for leadership in global auto markets, backed by timely
expansion in China and Latin America as well as its dominance in
Europe. Yet it continues to struggle in North America.
It swapped U.S. chiefs a year ago, disappointed by the results of a
push into midsize sedans assembled at a $1 billion factory in
Tennessee. U.S. sales of VW-branded cars have dropped 16 percent
since 2012.
To fight back, the company plans to triple its product range in the
fast-growing crossover segment and refresh models more quickly,
company sources said.
The campaign will include a five-seat variant of the forthcoming
midsize sport-utility vehicle (SUV), a concept version of which will
be unveiled on Monday at the Detroit auto show, the sources said.
VW is also stepping up cooperation with dealers and assembling a
team of 200 experts in R&D and design at its U.S. plant to ensure
vehicles better cater to American tastes.
"It took us long to realise that the U.S. market requires more
special attention," a senior manager at VW's German headquarters
said on condition of anonymity.
"You have to have an ear on the ground to capitalise on trends and
customer desires."
Michael Horn, VW's new U.S. chief, has reduced the product lifecycle
from seven to five years for sedans and is planning similar changes
for SUVs, one source said.
"It's the game you have to play in the hype-heavy U.S. market," the
source said.
TARGET MISS
VW's past failings mean it will miss an 800,000 U.S. sales target
for 2018, according to researcher IHS Automotive. It sees 547,000
sales of VW-brand cars by then, from last year's 367,000, missing
the goal by about a third.
Chief Executive Martin Winterkorn, at a reception in Detroit on
Sunday night, admitted it could be tough to more than double U.S.
sales to 800,000 by 2018. "This will not be a walk in the park," he
said. "We are facing challenges in this great market."
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IHS forecasts include VW's plans to overhaul the Tiguan compact SUV
this year, plus a coupe-style version and long-wheelbase model that
may offer a petrol-electric hybrid option.
A source at VW said the new long-wheelbase Tiguan seven-seat SUV is
most likely to be built in Mexico in 2017. The five-seat Cross Coupé
concept SUV to be unveiled at the Detroit show is likely to be
assigned to the Chattanooga plant, the source said.
U.S. compact SUV sales rose to about 1.49 million last year from
964,000 in 2009, while midsize SUVs grew to 1.69 million from
946,000, according to auto website Edmunds.com.
But VW won't benefit from the boom until new products arrive in
2016-17, Evercore ISI analyst Arndt Ellinghorst said, noting that
existing Tiguan and Touareg models cost more than rivals.
Also, Toyota and Mazda, buoyed by the weak yen, will keep pushing
into passenger cars, VW's traditional area of strength, he said.
(Editing by Mark Potter and David Goodman)
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