Volkswagen Scrambles to Halt U.S. Sales Slump

Wall Street Journal

After three years of strong gains Volk­swa­gen is scram­bling to halt an unex­pect­ed U.S. sales slump and get its ambi­tious Amer­i­can expan­sion back on track.

Find out more about Volkswagen’s plans as strat­e­gy ramps up for bet­ter sales.

After three years of strong gains, Volk­swa­gen AG is scram­bling to halt an unex­pect­ed U.S. sales slump and get its ambi­tious Amer­i­can expan­sion back on track.

The company’s VW brand is ramp­ing up dis­counts to pare slow-mov­ing inven­to­ries, espe­cial­ly for its redesigned Pas­sat sedan, which is made here. The com­pa­ny also is phas­ing in a new engine that should give VW cars both more pow­er and bet­ter gas mileage. Soon VW will launch a new Jet­ta com­pact with a sporti­er ride—something many Amer­i­can buy­ers expect in a VW— and next year a com­plete­ly redesigned Golf hatch­back.

“We’re a lit­tle behind where we want to be,” said Frank Triv­ieri, exec­u­tive vice pres­i­dent of sales for Volk­swa­gen of Amer­i­ca. “But we can make up ground.”

In July, Chief Exec­u­tive Mar­tin Win­terko­rn flew from Ger­many to smooth rela­tions with frus­trat­ed deal­ers gath­ered at a resort out­side of Wash­ing­ton, D.C. The com­pa­ny also “hit the reset but­ton” on its inter­nal sales tar­get for VW-brand vehi­cles, say deal­ers who attend­ed the meet­ing. For the remain­der of 2013, com­pa­ny exec­u­tives con­firmed, Volk­swa­gen is aim­ing for each VW deal­er­ship in the U.S. to sell at least one more car a month than a year ear­li­er.

Unsold Pas­sat sedans stored out­side Volkswagen’s Chat­tanooga, Tenn., fac­to­ry. Pas­sat sales have stalled recent­ly after VW’s big invest­ment here.

VW had redesigned the Pas­sat, a fam­i­ly sedan, to sell at a low­er price in the Amer­i­can mar­ket, cut­ting costs by using inte­ri­or plas­tics and oth­er mate­ri­als that were cheap­er than those used in the Euro­pean Pas­sat. The Amer­i­can mod­el also got a sim­pler, low­er-cost sus­pen­sion that deliv­ered a less pre­cise ride. Sim­i­lar cost-cut­ting was applied to the Amer­i­can ver­sion of the Jet­ta.

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