Volkswagen High on Hybrids

NEW YORK – Volkswagen of America Inc. remains committed to diesel-engine technology, but now is joining the hybrid crowd.

“Our commitment to the environment doesn’t stop with clean diesel,” VW of America CEO Stefan Jacoby says.

That’s why the German auto maker is introducing its first hybrid, a version of the ’11 Touareg cross/utility vehicle. It makes its U.S. debut at the New York International Auto Show here.

Currently, 50% of Touareg buyers opt for a diesel engine. “People love the diesel, but not everyone who is interested in fuel economy wants a diesel,” says Stephen Keyes, VWA public relations director.

Offering greater fuel efficiency than internal-combustion engines, diesels are popular in Europe, less so in the U.S.

Special Coverage

New York Int’l Auto Show

“More people are asking us, ‘Where’s the hybrid?’ Keyes says. “The market demands one from us. It will be interesting to see what the hybrid take-rate is on the Touareg.”

A Jetta hybrid is due out in two years, he says. Not long ago, VW and other German auto makers considered hybrids as a mere fad. But no longer. Even VW-owned Porsche AG introduced a hybrid Cayenne SUV at the show. The Cayenne shares its architecture with the Touareg.

’11 VW Touareg hybrid.

The Touareg Hybrid mates a 3.0L supercharged V-6 with an electric motor. The hybrid can travel up to 31 mph (50 km/h) on pure electric power.

Its fuel consumption is 25/21 mpg (9.4L-11.2 L/100 km) city/highway. The direct-injection engine and electric motor, combined, can produce 375 hp and 428 lbs.-ft. (48.3 Nm) of torque. Jacoby calls it a state-of-the-art, “with no compromises.”

VW diesels and hybrids won’t compete against one another for customers who focus on fuel efficiency, he tells Ward’s. “The hybrid is more for urban driving.”

VW is a leader in offering diesels to the American market. The diesel take-rate for the Jetta TDI is a relatively high 30% in the U.S. Jacoby says. “But we need to get more involved in hybrids.”

Widening its product mix also is seen as moving VW closer to its ambitious goal of becoming the world’s largest auto maker by 2018. “This is the year Volkswagen switches into high gear.”

In the past, VW has lost sales in the U.S. by not always satisfying market demands, claims Michael Jackson, CEO of AutoNation Inc. dealership chain.

“VW’s attitude was, ‘We build these great products, and Americans are too stupid to buy them,’” he says at a conference here put on by the National Automobile Dealers Assn. and IHS Global Insight. “That arrogance has cost them.”

But the German auto maker is “way past that,” Mark Barnes, VWA’s chief operating officer, says, giving much of the credit to Jacoby.

“Stefan looks at it from an American perspective,” he says. “He goes to Wolfsburg (VW’s headquarters city) and fights for his American operation.”

[email protected]