Browning Exits VWA Amid U.S. Sales Slide

Volkswagen of America President and CEO Jonathan Browning has stepped down effective immediately.

Taking over the top spot is Michael Horn, 51, a 13-year VW veteran who has led the automaker’s global after-sales operation since 2009. Axel Schulte-Hürmann, currently head of supply chain, replaces Horn.

It is unclear whether Browning was forced out by upper management at its German parent, but pressure has been mounting over the Volkswagen brand’s underwhelming sales in the U.S. this year. VWA says Browning is exiting for personal reasons and plans to return to his native U.K.

Through November, deliveries were off 5.2% from year-ago in a market that is up 8.3%, according to WardsAuto data, and last month saw severe drops in demand for several core models, including the Jetta (16.3%), Passat (19.1%) and Tiguan (23.7%).

Browning has been pleading for patience from the media in monthly conference calls to discuss sales results, pointing out the brand is in a bit of a new-product lull as it awaits a new Golf model next year.

“We’re on a long-term journey,” he said in early November. “Always we’ve indicated that sales growth would moderate after 2009-2012, where we more than doubled the size of the business.”

In discussing November’s 19.6% decline, he emphasized the month’s performance as the second-best November for the brand since 1973 and noted VW would surpass the 400,000 mark in sales in back-to-back years for the first time in 40 years.

But VWA likely will continue to be challenged in 2014. The Golf has not been a high-volume car for the brand in the U.S., and even the heavily revamped new model is unlikely to move the sales needle significantly.

And there doesn’t seem to be a near-term solution on the horizon for a people-mover to replace the discontinued Routan minivan and fill the gaping hole in the lineup for a midsize CUV in one of the U.S. market’s hottest segments.

Plans to produce a Ford Explorer competitor based on the CrossBlue concept shown in Detroit in January continue to lag. Insiders say VW still hasn’t proved out the business case for the vehicle. But controversy over union representation at the automaker’s Chattanooga, TN, assembly plant, the leading candidate to build the model, also could be delaying action.

Without a mainstream CUV and a more American-market-friendly Tiguan, significantly increasing sales and hitting the 800,000-unit annual target by 2018 will be difficult.

In the sales call earlier this month, Browning vowed not to step up spiffs in order to boost volume, in spite of heightened incentive activity in some segments of the market. That strategy may have to change under Horn if VW wants to reverse the sales slide in first-half 2014.

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