Volkswagen considering pulling out of America?

When the reinvented Beetle hit the US markets in 1998, Volkswagen enjoyed an amazing comeback from a long period of slow sales. But for the past three years, history is repeating itself as Volkswagen’s US operations have lost close to $1 billion annually. Things may be so bad for Volkswagen in the US that the largest German auto maker may even consider pulling out of the market altogether.

Of course an attempt is being made to save the brand in the US. The company has hired Stefan Jacoby, who was once the head of Volkswagen’s global sales and marketing, to help turn things around.

Jacoby has already helped Volkswagen increase its European market share from 18.1 % to 20.3%. Now taking up his biggest challenge yet, Jacoby is working to turnaround US operations hoping to meet Winterkorn’s target of breaking even by 2009.

According to BusinessWeek, the perception in the US that Volkswagen lags quality over its Japanese rivals is making things harder for the German auto maker to fight in a competitive market. An executive close to VW: “For the first time in some time, the phrase if we are to stay in the U.S.’ precedes a lot of conversations at VW.”

Our 2-cents: While the upcoming 2009 Volkswagen Clean Diesel Jetta TDI may help sales, Volkswagen desperately needs to consider bringing the 43mpg Volkswagen Polo to the US (check out our poll ‘Can we have the 43mpg VW Polo’). In a market so concerned with fuel-efficiency the Polo should help Volkswagen get a needed boost over rivals such as the Toyota Prius and Yaris and the Honda Fit. Offering BlueMotion (its greener versions of its lineup) variants of US models should help it gain respect amongst environmentally conscious drivers.

Dropping the slow-selling EOS and replacing it with a 7-passenger Sharan MPV should also help compete with the Honda Odyssey and Toyota Sienna. But we’re just a blog, what do we know?

If you guys have any suggestions, add it in the comments section below.


Source: BusinessWeek

[tags]Cars, Car, Auto, Automobile, Vehicles, Technology, Auto News, News, Automotive, Volkswagen[/tags]