{"id":76311,"date":"2014-05-13T13:43:07","date_gmt":"2014-05-13T17:43:07","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=76311"},"modified":"2014-05-13T17:09:11","modified_gmt":"2014-05-13T21:09:11","slug":"vw-likely-to-delay-ambitious-u-s-sales-targets","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2014\/05\/vw-likely-to-delay-ambitious-u-s-sales-targets\/","title":{"rendered":"VW Likely to Delay Ambitious U.S. Sales Targets"},"content":{"rendered":"
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Volkswagen plans to begin selling a midsize SUV, based off the CrossBlue, in the U.S. in 2016.<\/figcaption><\/figure>\n

Volkswagen\u2019s ambitious growth plans for the U.S. market are likely to be delayed \u2013 but are still within long-term reach, according to the maker\u2019s top U.S. executive.<\/p>\n

The German maker had set itself a goal of selling 800,000 vehicles a year in the U.S. under the flagship VW brand by 2018, while also sharply boosting sales of the Audi luxury brand. But while Volkswagen has enjoyed a significant increase in volume since the plan was first announced, growth has slowed in recent years, sales actually dipping slightly in 2013.<\/p>\n

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On Top of the News!<\/figcaption><\/figure>\n

And with demand dipping even further for the first months of this year, meeting the 800,000 target by 2018 now seems out of the question, Michael Horn, the 25-year Volkswagen veteran who recently took over U.S. operations, told TheDetroitBureau.com<\/a>.<\/p>\n

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The CrossBlue is expected to be pivotal to Volkswagen's now long-term goal of selling 800,000 vehicles in the U.S.<\/figcaption><\/figure>\n

\u201cFor now, we have to have realistic targets,\u201d Horn said, during an interview in San Francisco coinciding with VW\u2019s launch of the all-new, seventh-generation Golf hatchback. And hitting the sales target by 2018, he acknowledged, \u201cis a challenge.\u201d<\/p>\n

That said, Horn stressed, \u201cthe vision is right\u2026 long-term. But timing is the huge challenge.\u201d<\/p>\n

Horn made clear he was not ready to issue a formal statement revising the bold plan first outlined by former Volkswagen Group of America CEO Stefan Jacoby in 2008. But with the target date fast approaching and VW only halfway to its sales goal, there seems little doubt the maker will have to issue a public revision in the near-term, he confirmed.<\/p>\n

\u201cIt\u2019s only a few years away,\u201d with virtually no chance of making it, agreed Stephanie Brinley, a senior analyst with IHS Automotive, who described the original sales target as \u201chubris.\u201d<\/p>\n

In the heyday of the original Beetle, Volkswagen was the biggest import nameplate in the American market. But as the Bug aged and the twin oil shocks of the 1970s got American motorists focused on fuel economy, the maker began losing ground to Japanese competitors like Toyota, Honda and Nissan. Quality problems made the situation only worse. And after closing its original U.S. assembly plant in Westmoreland, Pennsylvania, three decades ago, industry analysts suggested VW was losing interest in the American market.<\/p>\n

By the early 1990s, annual sales bottomed out at around 54,000, and VW gave serious thought to abandoning the American market entirely, following such European brands as Renault, Peugeot and Fiat. VW ultimately chose to stick it out but sales rebounded only gradually and have, ever since, been on a roller-coaster ride.<\/p>\n

Under former CEO Jacoby, demand began to improve, giving VW hope it could become a serious player in the U.S. again. From barely 200,000 vehicles a year, sales hit the critical 400,000 mark three years ago, reaching a level Volkswagen hadn\u2019t seen since the original Beetle was at its peak.<\/p>\n

Credit went to not just some updated products, but to models specifically tuned to the American market. The 2011 launch of on all-new Passat seemed poised to give the maker critical momentum, especially as it launched production of the big sedan at a new assembly plant in Chattanooga, Tennessee, VW\u2019s first factory in the U.S. since the Westmoreland facility was shuttered.<\/p>\n

(Mahindra USA lands in metro Detroit. For more, <\/em><\/strong>Click Here<\/a><\/span><\/strong>.)<\/em><\/strong><\/p>\n

But there were major gaps in the line-up, Horn acknowledged. In particular, the maker needed to target both the midsize and compact SUV segments \u2013 two of the largest niches in the American market. But plans have been repeatedly delayed, despite expectations the production plans for the midsize CrossBlue utility vehicle would be revealed in 2013.<\/p>\n

Horn hints that the details should be announced shortly, and production is expected to be handled by the Chattanooga plant \u2013 which would undergo a significant expansion to handle CrossBlue and possibly other future models, such as a second SUV based on a stretched version of the current Tiguan.<\/p>\n

(<\/em><\/strong>Click Here<\/a><\/span><\/strong> for more about the new era of connected cars in America.)<\/em><\/strong><\/p>\n

The delay in launching those new utes, as well as the fact that the American Golf debut lags a year behind Europe, surprises some observers. Without a full product portfolio, said analyst Brinley, there\u2019s been little way for VW to maintain its pace of growth.<\/p>\n

So, why set an admittedly aggressive plan only to short-circuit it by delaying new product? Horn stressed that VW wanted to ensure the production version of its well-received CrossBlue Concept was properly tailored to the market.<\/p>\n

\u201cWe\u2019ll succeed only if we build the cars people want here,\u201d he emphasized.<\/p>\n

But several well-placed VW sources suggested that was only part of the problem. The maker has been ambitiously pushing to grow its presence not only in the U.S. but a variety of other markets, notably including China, which is now the world\u2019s largest automotive market.<\/p>\n

(To see more about a $50 million donation by the Detroit Three, <\/em><\/strong>Click Here<\/a><\/span><\/strong>.)<\/em><\/strong><\/p>\n

\u201cChina took precedent,\u201d said one insider, noting that cash originally targeted at the U.S. was diverted \u2013 effectively. VW last year nudged past archrival General Motors to become the largest automaker in China. And that could pay off on a broader scale. VW also passed GM in global sales and is now chasing close behind Toyota, which it hopes to leapfrog before decade\u2019s end.<\/p>\n

But VW officials know that to firmly take worldwide sales leadership they cannot again ignore the U.S. market. So, expect to see them shift resources back to the States over the next several years. The 2018 goal may get pushed back, but it won\u2019t be abandoned, Horn underscores.<\/p>\n","protected":false},"excerpt":{"rendered":"

Volkswagen\u2019s ambitious growth plans for the U.S. market are likely to be delayed \u2013 but are still within long-term reach, according to the maker\u2019s top U.S. executive. The German maker had set itself a goal of selling 800,000 vehicles a year in the U.S. under the flagship VW brand by 2018. To see why they won’t hit it, go to TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":57112,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/76311"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=76311"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/76311\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/57112"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=76311"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=76311"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=76311"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=76311"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=76311"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=76311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}