Auto Service World
News   November 29, 2016   by Auto Service World

VW’s Long Journey Back

Herbert Diess, the global CEO for the VW brand who arrived at Volkswagen from BMW last year, outlined his vision for reviving its U.S. operations through a combination of more America-friendly products, better utilization of its plant in Chattanooga and a commitment to electric vehicles as a successor to the diesels that had been critical to its previous growth ambitions.

Diess’ first comprehensive global strategy for the Volkswagen brand pegs the U.S. as a critical market and production base to drive the automaker’s profitability in the next decade but recognizes that a full recovery there will be a long-term project at best.

And Diess says those diesel vehicles — which accounted for about 20% of Volkswagen’s U.S. sales before the emissions scandal — won’t be part of the VW brand’s U.S. future.

“We want to write a comeback story,” said Diess, insisting that the brand had to move from being a niche carmaker in the world’s second-largest auto market to a volume player if it wants to strengthen its profitability.

“The U.S. is not just a very large market but a highly profitable one as well,” he said. “Nowhere is more money earned than in the U.S., and that will most likely still remain the case in 2025.”

Diess’ remarks represent an effort to reassure VW’s 652 U.S. dealers that Volkswagen is committed to the market for the long haul, with a plan to seek sustainable returns from the U.S. long after the crisis subsides.

The bad news for them is that none of this entails any short-term fixes. Diess said it would take perseverance to prevail in the U.S. market, anticipating that even with fresh products on the way to U.S. dealerships this year and next, his plan would need 10 years to achieve its goal of making VW a relevant choice to a broad number of American car buyers.

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