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.