VW Focuses on NA Profitability

GENEVA – Volkswagen AG expects a flurry of new products, including the Jetta, Passat and Audi A3, to help improve its performance in the U.S.

But the auto maker cautions it may adjust volume expectations in light of the weak U.S. dollar and strong euro, which is draining profits from its North American operations.

“The key event for the U.S. market is the new (Mexico-built) Jetta, which comes from a dollar (denominated production) base, and later in the year the Passat and the Audi A3 (that) will both be imported,” VW Chairman Bernd Pischetsrieder tells reporters on the sidelines of a media briefing at the auto show here. “We think that with these products it will be possible to reduce our limited subsidies in the market.

Volkswagen Chairman Bernd Pischetsrieder

“Whether this is enough (to return North America to profitability) is another question,” he adds.

VW has no plans to de-content any of its vehicle in the U.S. market to reduce costs and boost profits, Pischetsrieder says. “I don’t think cars are getting more competitive when they are de-contented.”

He says the overall driver for the North American business will be to return to profitability, not to grow share.

“The first issue is that we are profitable, not the volume. The volume is of no importance whatsoever,” he says.

While many foreign and U.S. domestic manufacturers have been launching new products in the U.S. with minimal incentives, Pischetsrieder says VW will not put any incentives on its new Passat when it rolls out in the coming months. “I am completely opposed to that,” he says.

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