VW maps out blueprint for comeback in US

11/23/2016

Battered by an emissions scandal that undermined its reputation and sales, German automaker Volkswagen Group mapped out a plan to re-emerge as a major player in the lucrative U.S. automotive market.

After a bruising year of investigations, negative publicity and poor sales, Volkswagen outlined a plan to “evolve from a niche supplier into a relevant and profitable volume producer” in North America.

The plan is part of Volkswagen’s global bid to capture a leadership position in electric vehicles, sport utility vehicles and ride-sharing.

“We will be significantly stepping up our activities in the USA,” VW brand CEO Herbert Diess said in a statement. “The main focus will be on the key segments in the country, large SUVs and limousines. In those segments, we will be strongly expanding our range.”

The second stage of the growth plan will involve bringing electric cars to North America, including “considerable investments in electric infrastructure” and “local production” of electric vehicles starting in 2021, the automaker said.

Growth would mark a reversal for Volkswagen, which has suffered since U.S. regulators in September 2015 exposed the company’s cheating on emissions tests. VW has since admitted to rigging 11million vehicles worldwide with software to dodge emissions standards and has agreed to a settlement potentially worth nearly $15 billion for consumers and regulators.

Sales have dropped sharply, in part because dealers are not allowed to sell diesel vehicles fitted with the bogus software. Another factor: The company has sorely lacked the SUVs and crossovers that American consumers are demanding.

U.S. sales of VW brand vehicles through the first 10 months of 2016 were down 13.1 percent from a year earlier to 256,047 units, according to Autodata.

The new roadmap is part of a broader strategy through 2025. The automaker said the plan includes an “SUV offensive” and a goal of selling 1 million electric vehicles globally per year by 2025.

The brand is also aiming to bolster its global operating profit from 2 percent in 2015 to 4 percent in 2020 and 6 percent in 2025. That will get a boost from the company’s recently announced plans to cut 30,000 VW positions worldwide through attrition and buyouts.

Source: Knoxville News Sentinel; USA Today, by Nathan Bomey

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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