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VW Inching Towards Profitability in the States

2011 sales should hit 300,000 despite slow U.S. recovery.

by on Sep.29, 2011

The new U.S. version of the Jetta has been instrumental in VW's American revival.

Long operating deep in the red, Volkswagen’s U.S. sale unit is on track to turn a profit for the first time since 2003, according to the German maker’s top American executive.

“This is our expectation,” Jonathan Browning, Volkswagen Group of America’s president and chief executive officer told reporters after an appearance at the Society of Automotive Analysts’ annual strategic planning summit.

VW’s luxury arm, Audi saw its North American sales operations become profitable last year, Browning added, in the face of steady growth in demand.

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“This is a very narrow definition of profitability,” Browning cautioned, noting that it doesn’t include financial statements from the company’s parts distribution network, nor does it include the share of corporate overhead allocated to North America by VWGoA’s parent company in Wolfsburg, Germany.

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VW Product Blitz Could Include New 7-Seat SUV and Bulli Microvan

But diesels are driving big gains for the German maker.

by on Aug.24, 2011

The sporty new Golf R joins VW's U.S. line-up for 2012.

With a goal of more than doubling sales – to 800,000 a year – by 2018, Volkswagen officials are rapidly ramping up the maker’s U.S. line-up and expect to have several new offerings roll into dealer showrooms over the next few years, including a 7-passenger SUV and possibly a production version of the popular Bulli microvan concept.

But the maker’s secret weapon may be its increasing reliance on diesel powertrains, which are gaining converts at a rapid rate.  Facing the prospect of tough new fuel economy regulations, Volkswagen is betting on the latest generation of oil-burners — though it will also be rolling out an array of electrified offerings, including hybrids, plug-ins and pure battery-electric vehicles, the maker’s top U.S. executive told TheDetroitBureau.com.

“Our challenge is to dig deeper” and come up with new products “appropriate for the U.S. market,” explained Jonathan Browning, the British automotive veteran who signed on as CEO of the Volkswagen Group of America last year.

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The good news, he suggested, is that there is a deep well of product available within the global VW portfolio.  Even better, the long-ignored U.S. subsidiary is now high on the radar screen in Wolfsburg, which sees a strong presence in the States as essential to Volkswagen’s global ambitions.  By 2018 the maker intends to be selling 10 million vehicles annually worldwide, a target that could position it as a serious challenger to both Toyota – the global leader for the last several years – and General Motors, which is expected to regain the sales crown this year.

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2012 Volkswagen Beetle Priced to Start at $18,995

Base model will come in above VW’s larger Passat.

by on Jun.07, 2011

VW will market three distinct versions of the 2012 Beetle, though the diesel won't debut until next year.

The new 2012 Volkswagen Beetle will carry a base price of $18,995 – plus another $770 in destination charges – the German maker has announced.

That means VW is cutting the price of the next-generation Beetle by $445 compared to the outgoing coupe’s MSRP of $19,440.  On the other hand, the 2012 Beetle will come to market at just an even $1,000 less than the $19,995 base price for Volkswagen’s all-new – and much larger — Passat, the first car to roll out of its new factory in Chattanooga, Tennessee.

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But price alone isn’t expected to be the big motivator when it comes to getting buyers into showrooms for what is only the third-generation Beetle.  The new model – which had a global unveiling in Shanghai, New York and Berlin in April – is intended to revive the quirky appeal of the original “people’s car.”

The 2012 model is 6 inches longer than the so-called “New Beetle” that it replaces, which much of the added length going into is extended snout.  It’s also 3.3 inches wider, for better shoulder room, but a half inch lower. Nonetheless, with the revised seating configuration, VW claims there will also be more headroom — and cargo space.

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Former GM PR Exec Cervone Joins Volkswagen

Will head German maker’s American communications team.

by on Mar.21, 2011

Tony Cervone goes from GM to United and now to Volkswagen.

Tony Cervone, a veteran hand at automotive public relations, will take over responsibility for communications for Volkswagen Group in North America.

As Executive Vice President, Group Communications, Cervone will play a major role in shaping the German automaker’s image in the Americas at a time when VW intends to achieve some major growth.

Cervone, whose career has included long stints at Chrysler and General Motors, will report directly to Jonathan Browning, President and CEO of Volkswagen Group of America, and will be a member of the company executive management team.  Cervone’s appointment is effective immediately.

“I welcome Tony to our management team. In his 24 years in automotive communications, Tony has continually demonstrated communications leadership in this industry.  I believe he will be a critical member of the team and will help drive the aggressive growth goals we are facing,” said Browning, who took over the VW Group position last year.

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In his new role, Cervone will be responsible for all aspects of corporate communications.  This includes corporate media relations, all public relations campaigns, community partnerships and philanthropy.

It is a critical time for Volkswagen.  The maker has been growing fast and has set a goal of becoming the world’s largest automaker by 2018.  But it continues to struggle in the U.S., where it has yet to match the peak sales volumes of the ‘60s and ‘70s.  The goal is to reach a new record of 800,000 sales by 2018 – and that will require hitting a number of critical marques.

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First Look: 2012 Volkswagen Jetta GLI

Turbocharged brand-building.

by on Feb.09, 2011

VW lifts the covers on the sportiest new Jetta, the GLI.

It’s brand-building time at Volkswagen, and the once-dominant German import is convinced that a wave of new products will help it recover its lost glory.

With the launch of its new American assembly plant, and sale of the U.S. version of the bigger Passat just months away, VW turned to the sportier segment of its line-up at the Chicago Auto Show, unveiling the top-line version of its latest Jetta family, the 2012 GLI.

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At a price of $23,495, the new model, as with the rest of the Jetta line, is, “the only truly accessible German-engineered car in its class,” suggested Jonathon Browning, the British industry veteran who took over VW’s U.S. operations last year.

With the GLI designation, Jetta gets a new turbocharged 2.0-liter inline-four making 200 horsepower and 207 pound-feet of torque, which compares to the 115 hp of the base I4 package, and the 170-hp 2.5-liter Jetta I5.

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Audi Soon to Decide on U.S. Assembly Plant

May be essential for Audi's goal of doubling sales.

by on Jan.14, 2011

Audi will decide whether to build a U.S. assembly plant by year's end, says Jonathan Browning.

Audi is giving serious consideration to adding its own production plant in the United States as part of the Volkswagen subsidiary’s plan to double sales to 200,000 by 2018.

While the German marque has become one of the world’s largest luxury brands – in some markets now leading more established rivals like Mercedes-Benz and BMW – it has continued to lag in the U.S., where it never fully recovered from a safety scandal back in the late 1980s, despite having been cleared by federal regulators.

Jonathan Browning, the new CEO of the Volkswagen Group, the U.S. subsidiary of Volkswagen AG overseeing both the VW and Audi brands, says a decision on the American assembly plant will be made by the end of 2011.

That would finally wrap up an ongoing debate that has spanned more than a decade.  While both Benz and BMW now have major assembly operations in the U.S., Audi has resisted setting up a “transplant” assembly line, in part, because of the limited sales volumes it has achieved in the States.  But critics have argued that the maker is suffering from a chicken-and-egg syndrome and can’t build volume without the plant.

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Playing in favor of setting up a facility, lopsided dollar/Euro exchange rates have made it increasingly cost-prohibitive to import vehicles from Europe, especially smaller models like the popular A4.

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Jonathan Browning Takes Over as VWoA CEO

German maker putting increased emphasis on U.S. market, says new Volkswagen of America boss. It's not a new claim.

by on Sep.13, 2010

New VWoA CEO Jonathan Browning.

Volkswagen has appointed industry veteran Jonathan Browning the new chief executive officer of its U.S. subsidiary, filling a critical vacancy created by the unexpected departure of Volkswagen of America CEO Stefan Jacoby, who left unexpectedly in June.

It comes as something of a homecoming for Browning, who has lived in the U.S. twice – once to earn an MBA from Duke University – and who previously worked for both General Motors and Ford Motor Co.

“We know we have a lot of work to do,” Browning declared during a news conference at the National Press Club, in Washington, D.C., not far from the automaker’s suburban U.S. headquarters.  Noting that VW aims to boost sales to 800,000 by 2018, the new CEO said, “We have set ourselves some big goals, but I am confident we can do this.”

With an expertise in marketing and sales, the 51-year-old Browning has had something of an unusual career for a European automotive executive, moving from one maker to another a number of times since launching his career at General Motors in 1981.  He eventually left for Ford, where he served as Managing Director of Jaguar from 1997 through 2001.  He eventually returned to GM, but left following  the maker’s plunge into bankruptcy.

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In June of this year, Browning resurfaced, this time at Volkswagen headquarters, in Wolfsburg, Germany, where he was put in charge of national sales efforts for all 10 of the company’s brands.  It was a plumb assignment overseeing sales that have risen, on a global scale to 6 million annually.

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