BARCELONA, Spain –of America Inc.’s growth strategy in the U.S. will play out on several levels, with the repositioning of existing models and the rollout of several new products taking center stage in the effort.
In order to nearly double the auto maker’s sales in the U.S. to 400,000-500,000 units, something Executive Vice President Adrian Hallmark envisions happening within five years, VW must be more competitive with its volume models, while simultaneously filling the gaps in its existing lineup with several new entries.
Ideally, a core lineup of four to five volume models will manage the bulk of the auto maker’s sales going forward, Hallmark says at a recent drive of the new ’08 Touareg cross/utility vehicle here.
Four or five niche vehicles, such as the Eos convertible and R32 performance hatchback, are expected to further strengthen the brand and count for an additional 10,000 units each, he adds.
Key to much of the increase and arriving in dealerships this fall in sedan and all-new wagon variants is the ’08 Jetta, which will continue to anchor the marque in North America and is expected to reap the greatest benefits from the auto maker’s push to improve manufacturing efficiency.
Although a timeframe for the results of the new efforts to materialize remain uncertain, improvements in production and management will allow the next-generation Jetta (arriving late in 2009 as a ’10 model) to move down in price and better compete with segment stalwarts, such as theCamry and Accord, Hallmark says, noting a base price range of $15,000-$19,000 would be ideal.
However, the current model has a more immediate challenge: shepherding into the U.S. the latest generation of VW’s clean diesel technology.
“Americans still don’t understand diesels,” says David Goggins, director-product and marketing strategy. “The image (of diesels) needs to be conquered (for us to succeed).”
To that end, the TDI (turbo direct injection) badge will reappear on many new VW’s, as the auto maker resurrects its diesel lineup following a 1-year hiatus in ’07 to fine-tune the technology to meet new emissions requirements in the U.S.
Most ’08 models will be available with an optional 2.0L 4-cyl. TDI powerplant, which Hallmark says is capable of delivering an estimated 55 mpg (4.3 L/100 km) in the new Jetta wagon. A 3.0L V-6 TDI will arrive later in the year in the Touareg, replacing the CUV’s current 5.0L V-10 turbodiesel.
A 4.2L V-8 TDI, currently offered on several VW and Audi models in Europe, may serve as a replacement for the burly V-10 TDI if diesels prove successful in the U.S., Hallmark adds.
The new TDI vehicles, along with several upcoming diesel models from Audi AG, will be marketed under the Bluetec moniker, which DaimlerChrysler AG coined as the name for its suite of clean diesel technologies in its Mercedes-Benz lineup.
However, in contrast to previous media reports, no technology sharing is taking place between the auto makers, and the Bluetec badge will not appear on any VW models, Goggins tells Ward’s.
“We joined together (with DC) for marketing (purposes),” he says, noting the combined marketing muscle of the three companies will improve the communication with consumers as to the benefits of clean diesel.
“Bluetec is becoming synonymous with clean diesel,” Goggins says.
Also benefiting from improved operations will be the new Passat, which will appear towards the end of 2010.
Like the Jetta, the new Passat will come down in price ($20,000 base price range) to better compete with its rivals, yet, will retain its current virtues, such as exemplary build quality, attractive design and satisfying performance.
Hallmark declines to offer specifics of the new car, but says it will be a combination of existing platforms, rather than an all-new architecture.
Foreshadowing the new Passat, while also managing the more emotional, upper end of the midsize sedan segment, will be a new Passat-based 4-door coupe, internally dubbed the CC.
Information is scarce on the new ’09 model, but Hallmark promises a striking design with the CC, which will debut “no later than the (2008) New York International Auto Show” in March. Production is scheduled to commence next May, with U.S. deliveries starting in August.
In addition to the CC, next year also will see VW enter the small CUV segment with the Golf/Rabbit-based ’08 Tiguan and the minivan market with a new, yet-to-be-named, vehicle based onGroup’s upcoming next-generation family hauler.
The Tiguan, which will be offered with the 2.0L TDI, will square off against theX3 and Acura RDX in the upper ranges of the segment, Hallmark says, adding the TDI version should achieve fuel economy figures greater than 40 mpg (5.9 L/100 km).
“Tiguan doesn’t need to be cheap, but it needs to be good,” he says, adding a third CUV, slotting below the Tiguan, may be a possibility, as well.
The minivan, which will go on sale in third-quarter 2008 as an ’09 model, will follow a similar path as the new CUV.
Based on the platform of the upcoming ’08 Dodge Caravan andTown & Country, the new vehicle will sport key VW virtues, such as a dominant chrome grille and bespoke, upscale interior. Another virtue will be allowing the auto maker to retain customers it otherwise would have lost due to its lack of an entry in the segment.
Goggins says VW currently is not planning on providing a TDI option for the minivan, “but we’d love to offer all of our future products with TDI.”
Chrysler will build the new minivan under contract alongside its platform-mates in St. Louis, MO, Hallmark says, stressing the recent sale of the Auburn Hills, MI-based auto maker to Cerberus Capital Management LP should have no effect on production.
When asked if the minivan foretells the resurrection of the iconic Microbus, concepts of which have been extremely popular on the show circuit, Goggins says: “It’s possible, but this new era of manufacturing flexibility must play out first. It would be the Bentley of minivans (if it were built) though.”
Another upcoming new entry for VW will be in the small-car segment, the details of which are far less certain.
“We’ve got to be there (in the U.S. small-car market),” Hallmark says, noting a group is working on a small-car entry, with several different possibilities in mind.
One idea regards the next iteration of the New Beetle, which could entail an all-new model along the same lines as the current vehicle. Another option is a modern reincarnation of the original “people’s car”, specifically, one that is cheap, reliable and simple.
“We’re also fighting for the Polo (for the U.S.),” Hallmark says, referring to the European model that slots below the Golf.
Canada’s significant small-car market is a key driver for a strong entry in North America, he adds, noting two to three years is the earliest the auto maker could have a new Polo on U.S. soil.
Along with strengthening its offerings in the U.S., other items on VW’s near-term “to-do” list include the continued expansion of its TDI technologies and the greater implementation of spark-ignited engine systems, such as FSI (fuel-stratified injection) direct-gasoline injection and the “twincharger” (supercharger/turbocharger combination) forced-induction setup currently found on the Golf GT in Europe.
Hybrid-electric powertrains are being worked on, as well, with the first applications likely arriving early next decade, Hallmark says, adding VW also is working with Choren Industries GmbH on a major biomass-to-liquid biofuels program, which the auto maker believes could significantly reduce the use of food crops in ethanol and biodiesel production.