Fate of VW in America Rides on Atlas’ Shoulders

Volkswagen marks the symbolic Day One of its post-Dieselgate revival on California’s Santa Monica Pier, unveiling the long-awaited Atlas CUV aimed at the heart of the American market and charged with putting the German brand back on a growth trajectory in the U.S.

The Atlas is the production version of the CrossBlue concept displayed in a number of iterations at auto shows around the world over the past three years.

Segmented as a Large CUV by WardsAuto, it is targeted at a wide range of midsize and fullsize unibody-based utility competitors, including the Ford Explorer, Jeep Grand Cherokee, Mercedes GLE and a couple dozen other models. It’s a sector that is expected to account for nearly 4.5 million sales in the U.S. this year and top 4.7 million units annually in 2019, according to a WardsAuto forecast.

Shown off at the Western end of historic Route 66 with what was expected to be all the pomp and ceremony VW could muster, the Atlas offers 3-row seating for seven, a choice of two powertrains, a host of advanced safety equipment and optional all-wheel drive.

With utilities the fastest-growing vehicle segment in the U.S., the lack of a fully Americanized entry in the midsize/large sector has taken most of the blame for VW’s paltry single-digit market share. That was until the diesel-emissions-cheating scandal that broke a year ago and sent sales plummeting even further and faster.

Now the Atlas must do double duty, not only carving out ground in a hotly contested segment for a tardy VW, but also helping revive the brand’s standing with consumers and its dealer body.

“This is the biggest and boldest Volkswagen we have ever built in the United States, delivering the distinctive design and craftsmanship we’re known for, now with room for seven,” Hinrich Woebcken, who replaced an ousted Michael Horn as Volkswagen of America CEO in March, says in a statement distributed ahead of the CUV’s unveil. “The Atlas marks a brand new journey for Volkswagen to enter into the heart of the American market.”

On its arrival, the model can be had with either a 238-hp 2.0L DI turbo 4-cyl. or 280-hp 3.6L V-6. Both deliver power to the front axle through a standard 8-speed automatic transmission. The V-6 can be mated with VW’s 4Motion AWD as well. Fuel-economy ratings won’t be released until closer to launch in spring 2017.

Based on VW’s MQB architecture that underpins the Golf, Jetta and Beetle, the Atlas measures 198.3 ins. (5,037 mm) overall, 77.9 ins. (1,979 mm) wide and 69.6 ins. (1,768 mm) tall – spot on with the Explorer.

Exterior design “retains classic proportions and clean lines that create a sense of timelessness and precision,” the automaker says. But VW beefs up the vehicle’s appearance with bold wheel arches, sculpted rocker panels and aggressive cuts into the hood and rear hatch.

Inside, the Atlas carries forward VW’s current design language, with a crisply linear dash and visually appealing materials. The CUV’s “Digital Cockpit” can be reconfigured to display whatever information the driver desires.

Features include Apple CarPlay, Android Auto and MirrorLink connectivity, plus an optional Fender 480-watt, 12-speaker audio system. Among available safety offerings are adaptive cruise control, forward-collision warning with autonomous braking, blindspot monitoring with rear-traffic alert, lane-departure warning, parking assist and automatic post-collision braking.

Atlas Lead in CUV Assault

Dealers have been reeling since the Dieselgate scandal, which is expected to cost VW more than $15 billion and has seen its U.S. sales fall by double digits. Vehicles aren’t moving out of showrooms quickly, with overall inventory for the brand at 110 days’ supply at the end of September.

In August, VW moved to compensate retailers for the drop in demand and subsequent devaluation of their franchise holdings, offering a $1.2 billion package to help offset declining franchise values.

But what dealers are eager for most is new product. The Atlas marks the first all-new entry for the automaker in the U.S. since Passat was launched in 2008. Like the Passat, the Atlas will be built at VW’s Chattanooga, TN, assembly plant, with Job One expected in December.

The Atlas is the centerpiece of VW’s planned assault on the CUV market in the U.S. That attack will be bolstered by a new, larger Tiguan that will be built in Mexico beginning in 2017 and designed to better meet American buyer demands. The automaker hinted at the design direction for the next-gen model with its Tiguan GTE Active plug-in hybrid concept unveiled at the Detroit auto show in January.

Moving the Tiguan up the size spectrum could create room for a new smaller entry derived from the Golf-based T-ROC concept unveiled in Detroit in 2015.

“The next step we’re thinking about is a Golf SUV,” Heinz-Jakob Neusser, the former head of product development for the Volkswagen brand who was forced out by the diesel-emissions scandal, said at the time of the unveil. “This is (something) that could fit in the U.S. market.”

It is unclear whether VW would build the Golf-based CUV in North America if the project is green-lighted, but it is another model that would appear to be a fit at VW’s Puebla, Mexico, plant where the Golf, Jetta and Beetle are built.

There was no word ahead of the Atlas unveiling on whether a hybrid-electric powertrain might be in the cards for Atlas, though the automaker hinted at such earlier with the Cross Coupe GTE concept version unveiled in Detroit. Volkswagen Group is in the midst of an electrification movement, targeting sales of 2 million-3 million EVs annually across all brands by 2025, signaling it is shifting its investment dollars away from diesels and toward batteries.

VW currently offers three EVs – the e-Up, e-Golf and Audi R8 e-tron, as well as six plug-in hybrids, including the VW Golf GTE and Passat GTE; Audi A3 Sportback e-tron and Q7 e-tron quattro; and Porsche Panamera S E-Hybrid and Cayenne S E-Hybrid.

Volkswagen no longer talks about its lofty pre-Dieselgate sales goals, when it aimed to double volume to 800,000 units per year as early as 2018. Its recent sales peak was 438,133 in 2012, according to WardsAuto data. Sales this year total 231,268 through September.

In January, CEO Matthias Mueller signaled Volkswagen no longer would make becoming the world’s biggest automaker its primary target, saying he was preparing a 2025 strategy that won’t make “volume a cherished goal.”

But it’s clear if the brand is going to head back in the right direction near-term in the U.S., the new Atlas will need to do some heavy lifting.

[email protected] @DavidZoia