Could VW have pickup for Chattanooga?

3/29/2018

A Volkswagen pickup truck for the U.S. market, possibly based on the Chattanooga-made Atlas SUV, could make sense, an industry analyst said. But the German automaker would need to temper sales expectations, said Rebecca Lindland, executive analyst at Kelley Blue Book.

“I think it would be a challenge,” Lindland said.

VW is expected to show a surprise concept of a midsize pickup truck at the New York International Auto Show, according to an Automotive News report from Frankfurt, Germany. It said the vehicle could be assembled in Chattanooga if VW decides to enter the segment in the U.S.

Lindland said that while she wouldn’t anticipate “significant sales” of a VW truck in the U.S., more automakers are moving toward assembling niche products. If VW based the truck off of the existing Atlas SUV already built in Chattanooga and the production expense wasn’t huge, “go for it,” she said. “It makes sense from that standpoint,” Lindland said.

Chattanooga VW dealer Brad Cobb, president of Bowers Automotive Group, said if Volkswagen decides to make a pickup, the company likely would build “a more American-based truck” than it sells in other places in the world.

“In this market, it’s a huge segment. VW would excel,” said Cobb.

He said that Ford is bringing back the Ranger midsize truck to the market, for example. “That’s what Volkswagen is thinking,” Cobb said. “Trucks and SUVs are moving the market now. Everybody wants them.”

Mike Randle, publisher of Southern Business & Development magazine, said that while some pickups don’t sell well in America, “if [VW] makes a good one, they’ll sell.”

Randle said the Chattanooga VW plant, where it started assembly early this decade, should have first produced an SUV and then a pickup truck.

“I don’t know if I would have built a sedan,” he said.

Sedan sales are flagging in the U.S. market, and VW is idling its Chattanooga factory for two weeks as it reacts to slowing sales of its Passat sedan and higher demand for the Atlas.

Volkswagen of America reported earlier this month that sales of the Chattanooga- made Passat in February were 3,036, off 50.3 percent from a year ago. The Passat numbers come as Volkswagen of America sales overall were up 5.7 percent the first two months of the year, largely due to SUVs.

VW officials have announced it plans to assemble a five-seat SUV based on the seven-seat Atlas in Chattanooga starting late next year. VW already produces a midsize truck, called the Amarok, for use in South America, Europe and Australia. However, the vehicle isn’t certified by U.S. regulators for use in the American market.

Lindland said it appears that VW is looking at producing a car-based pickup, similar to the Honda Ridgeline. The Ridgeline lacks a body-on-frame construction that’s typical for a truck.

Even with Honda’s large overall sales numbers in the U.S., the Japanese automaker only sells about 35,000 Ridgelines a year, she said.

“You’d have to be conservative on the estimate based on how few Ridgelines Honda sells,” Lindland said.

Meanwhile, Toyota sold a record 198,124 Tacoma pickup trucks in 2017 to lead the segment in the U.S. The top five sellers in the segment reported sales of 452,000 trucks.

But in the full-size truck market, the top six sellers put up sales of 2.37 million, led by the Ford F-Series’ 896,000 units, according to PickupTrucks.com.

Chattanooga Times Free Press, by Mike Pare

The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org

 

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