Report: Volkswagen investing billions in U.S. comeback plan

2011 Volkswagen Jetta

Former number one import in the United States, Volkswagen AG is mounting a new attempt to reclaim that title from the Japanese automakers. Despite the failure of previous comeback attempts, the German company sounds fully confidant that it can post a comeback, with the weight of its two brands, Audi and VW behind it.

Volkswagen AG, which intends to be the worlds biggest carmaker by 2018 controls just 2% of the market – 3% when you consider Audi and other premium brands.

In order to be able to price cars more competitively for the U.S. market, alla the Japanese, VW is planning to build a $1 billion assembly facility in Tennessee, and is redesigning a number of compact and midsize cars to better appeal to North American tastes. “It appears now that we’re going to be priced as close to our Japanese competitors as we ever have been,” said Bob Grace, a Louisiana dealer who just opened a second VW store. “We can now compete head-on.”

Putting emphasis on the importance of the U.S. market, CEO Martin Winterkorn will be visiting California this week.

The all-new 2011 Jetta which is set to go on sale later this year, is bigger than the outgoing model, and carries an MSRP $2,000 less.

VW aims to double its VW brand sales in the U.S. to more than 400,000 vehicles within four years, and quadruple them by 2018, at which point it expects to be the world’s biggest automaker.

VW once sat atop the U.S. import market, but was overtaken by the Japanese who were able to outmaneuver the Germans through more adaptive design elements and more competitive pricing. VW is following suit in order to reclaim its throne.

– By: Stephen Calogera

Source: Detroit News