Despite ongoing problems related to its diesel scandal, the Volkswagen Group of America, Inc. is pushing ahead with multimillion dollar investments in the U.S. hoping it will kickstart a turnaround for the beleaguered German automaker.
The Volkswagen Group has opened a new $6.8 million part distribution center in Rocklin, California, north of Sacramento, that will supply service parts to dealers in northern California and the Pacific Northwest.
VW also said it is planning to invest an additional $4.5 million to open a new training center in Eastvale, California, just outside of Los Angeles. The $11.3 million investment is part of the company’s long-term commitment to the U.S. market and a broader strategy to invest more than $7 billion in North America through 2019, the German automaker said.
That investment includes the the much-publicized $600 million expansion of the company’s plant in Chattanooga, Tennessee. The facility, which has been a flashpoint site for many VW issues, such as union representation and new product production, is the home to the maker’s new seven-passenger SUV.
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Dubbed the CrossBlue as a concept vehicle in recent years, the ute is critical to the maker’s long-term success in the U.S. as it fills a large hole in its product portfolio. Utilities and trucks comprise 60% of new vehicle sales and VW has just two entrants, the slow-selling Tiguan and Touareg, in that category.
In the interim, the new West Coast facilities may be critical to the process of helping dealers there make repairs related to the diesel emissions problem. As part of a settlement, the company agreed to make repairs to ensure the vehicles are compliant with U.S. and California regulations and the parts center may play a role in that effort.
“The new parts distribution center and upcoming training center in California is a testament to Volkswagen Group of America’s continued investment and commitment to the U.S market, our customers, and dealers,” said Hinrich J. Woebcken, president and CEO, Volkswagen Group of America, Inc.
“The company remains focused on these types of strategic investments that will enable long-term growth in the United States,” he said.
(Click Here for details about the $18.2 billion hit VW is taking for its diesel deception.)
The new warehouse in Rocklin completes a U.S. network of seven Volkswagen Group parts distribution facilities across the United States, VW officials said. The 143,000 square-foot facility holds 40,000 automotive service part numbers and approximately $13 million in inventory, with distribution to 94 Volkswagen and Audi dealers across six states in the Pacific Northwest and Northern California.
“The new Rocklin facility plays a vital role in our commitment to providing quality service to our customers and dealer network in Northern California and the Pacific Northwest,” said Jan Bures, Executive Vice President Group After Sales and Services, Volkswagen Group of America, Inc.
“We are especially excited to increase our presence in California, a priority market for both Volkswagen and Audi brands,” Bures said.
The Rocklin PDC will enable improved efficiency in Volkswagen and Audi service parts deliveries and employ 30-plus people. It is the second VWGoA PDC in California. The other 310,000 square-foot warehouse is in Los Angeles.
The new education center near Los Angeles will house Volkswagen, Audi and Porsche training facilities for technical, collision repair and sales training. It will is the first training center in the U.S. to support all three brands and is expected to open in the first quarter of 2017.
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With the expansion, the Volkswagen Group now operates several sites in California, among them the Volkswagen Group of America Electronic Research Laboratory in Silicon Valley, a regional sales operations office in Woodland Hills, and the Test Center California in Oxnard.
