Long the laggard in the fastest-growing segment of the U.S. motor vehicle market, Volkswagen is racing to catch up, launching the all-new Atlas SUV and a complete makeover of its older Tiguan model.
Even those won’t be enough to help catch up with booming demand for utility vehicles, the German maker has concluded, so it has decided to not only launch the new Tiguan but continue selling the old model in the U.S., as well.
“We will produce (both),” said Hinrich Woebcken, CEO of Volkswagen Group of America, “because demand is so strong.”
Light truck sales in the U.S. accounted for nearly two-thirds of overall new vehicle demand in February, and is expected to go even higher in the months to come. But trucks account for only about 12% of VW’s share, said Woebcken, over breakfast at the Geneva Motor Show.
(VW updates Atlas for weekend warriors. Click Here for the story.)
“We are far under-represented,” said Woebcken, who took on the American assignment a year ago, in the midst of VW’s diesel emissions crisis.
The German maker doesn’t expect to catch up to competitors like Ford or General Motors because it doesn’t plan to add pickups to its line-up. But it does want to boost SUV sales substantially, as part of a broader comeback in the American market. Eventually, said Woebcken, utes might account for 40% of Volkswagen brand sales.
To get there, VW will need to add new models, as well as additional capacity, possibly in the U.S. at its plant in Chattanooga, Tennessee.
That plant recently went through a major expansion to handle production of the all-new Atlas, a bigger, three-row SUV. It will join the largest and most expensive ute in the VW catalogue, the Touareg.
Woebcken was attending the Geneva Motor Show, in part, for the launch of the Tiguan Allspace. That’s the European name for the long-wheelbase version of the midsize SUV that will be known simply as Tiguan in the U.S.
The new model will measure an extra 10.7 inches compared to the original Tiguan, its wheelbase stretched 7.4 inches. And customers will now have the option of ordering a third row of seats. VW engineered it for on-road travel, but boasts it can handle some modest off-road adventures, as well.
(Click Here for more details about the new Tiguan.)
The original plan called for VW to offer both versions of the Tiguan in Europe and some other markets, but only the stretched model in America. During the breakfast meeting, Woebcken revealed that the short version will remain in prediction indefinitely.
“We’re shifting into a much more family-friendly SUV brand,” he said, adding that 2017 “will be the year of the SUV for the brand.”
Volkswagen is also considering “an additional model” that could be “a variant of the Atlas.” That might be a production version of the CrossCoupe Concept VW showed a few years ago, a more coupe-like design along the lines of the BMW X6.
Where to build the new models is something VW is debating internally. The new, stretched Tiguan will come out of the maker’s massive plant in Puebla, Mexico – though the automaker is also looking at the possible need to relocate it to the U.S. or some other plant should President Donald Trump go through with a threatened import tax on Mexican goods.
According to Woebcken, there is “definitely room” to further expand the Chattanooga assembly line to handle either the long-wheelbase Tiguan or a new Atlas variant.
VW wouldn’t be the first maker to offer old and new versions of the same nameplate. In fact, that often happens when manufacturers phase out one model and slightly ramp up another. Occasionally, the original is retained for a year or two as a “heritage model,” and often sold at a discount, its tooling costs long paid off.
(Volkswagen spices up new Atlas with R-Line option. Click Here for the story.)
Woebcken declined to discuss pricing or naming plans for the carry-over Tiguan, saying those details have yet to be worked out.