Volkswagen of America’s new boss is confident the automaker can and will rebuild its North American business in the wake of the emission-cheating scandal.
The scandal has cost VW billions in fines and settlements, cuts sales substantially and left many of the company most loyal customers with vehicles that lost value and require major repairs.
Hinrich Woebcken, who took over the role of president and chief executive of VW Group’s operations in North America this past winter, said during a session with reporters at the preview of Volkswagen’s 2017 model line that Volkswagen has prepared a plan for a comeback in the wake of the company’s disastrous emission cheating scandal.
“We came into a crisis with this diesel engine,” said Woebcken. “We are really working to get this straight.
“We remain fully committed to the U.S. market. We need to stay in the North American market,” said Woebcken, who noted that in addition to spending $15 billion on the fines and settlements in the emission scandal, VW will spend another $7 billion on upgrading its North American operations.
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The upgrade includes new products such as the Golf Alltrack Sport Wagon, a new SUV code-named Cross Blue and a new Tiguan.
“We are busy ramping up for the new SUV. I’ve already driven the prototype. All three of the vehicles will be in showrooms by the middle of 2017. Beyond that there is also a new Jetta in product pipeline,” Woebcken said.
Woebcken said Volkswagen also is moving away from what he described as a reliance on what was basically a compact-car strategy to one that is more family oriented, which is more in keeping with preferences of American consumers.
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At the same time, VW plans to hold on to the elements that have always made it seem “cool and smart,” he said. “This brand has the very special element of being different,” he said.
Woebcken also told reporters that the VW Group has re-organized its operations in North America. The re-organization is keeping with VW’s plan to make its of its major regions more independent. China, Volkswagen’s largest market, is more independent because of the governance structure that requires the company’s ventures in China to have Chinese partners.
The new “governance” in North America give his operations more independence and the opportunity to get closer to American customers.
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At the same time, VW Group has given its North American operations more leeway in product design. The engineering next generation Volkswagen Passat, for example, will be finished at VW’s expanded engineering center in Puebla, Mexico.