Volkswagen Group has been trying to fix its underperforming U.S. business for years, and this has now become its top priority as the automaker navigates troubled waters in China and Europe.
Apparently, VW is willing to go all the way and fight Ford, GM and Stellantis on their own turf with rugged SUVs and pickups based on body-on-frame platforms.
VW Group CEO Sees Rugged SUVs And Pickups As The Way To Revive U.S. Division
VW Group CEO Oliver Blume said at a meeting with investors that he sees rugged SUVs and pickups like the Jeep Wrangler and Ford F-150 as a way to boost the German automaker’s declining U.S. business.
According to a transcript of the meeting seen by Bloomberg News, Blume told investors that VW Group lacks vehicles built on ladder-frame platforms, which typically underpin serious off-roaders and pickups that are highly popular in the United States.
He noted that such rugged models are an opportunity for the Volkswagen and Audi brands, suggesting that the automaker would build such cars in the USA. Blume noted that plans for body-on-frame SUVs and trucks go beyond Scout Motors’ already announced SUV and pickup.
During the Q&A session of the meeting, Blume talked about “profit pools still not played by Volkswagen Group, especially rugged SUVs and pickups” and made it clear that the plans go beyond Scout, which is owned by the group but operates as a separate, independent U.S. subsidiary.
VW Group’s Rugged Truck U.S. Offensive Is Likely To Start With Audi
VW Group’s chief financial officer Arno Antlitz backed Blume’s statements, pointing to the weakness in VW’s current lineup, namely poor margins for popular vehicles like the Jetta sedan and Taos subcompact SUV. Both models are shipped from Mexico and are currently subject to U.S. import tariffs.
Antlitz added that VW is now looking to shift toward richer parts of the market, although he reckoned that “it’s too early to make an announcement” regarding the Volkswagen brand. The company is instead planning to first move into segments “which are more promising in terms of margin”—a pretty clear hint at Audi.
This feeds into previous rumors about Audi planning an off-road SUV and Audi CEO Gernot Dollner’s recent confimation during a roundtable discussion with journalists that the company is evaluating a rugged off-road SUV.
A Significant Strategy Shift Is Underway
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The comments from VW Group top brass shed light on how the automaker plans to reshuffle its U.S. lineup, namely by developing vehicles tailored to the needs of American buyers rather than continuing with the same one-size-fits-all global-car strategy used until now.
Scout Motors will likely play a big role in VW Group’s U.S. plans as the startup’s factory in South Carolina will give the parent company a new U.S. manufacturing site for the type of vehicles Blume is targeting. Mind you, the CEO did not say whether future VW or Audi models would share Scout technology or plant capacity.
VW Group is hard-pressed to turn around its U.S. division as the China business, which used to be its most profitable, is struggling. Last week, VW finally got the support of labor leaders in Germany to cut as many as 100,000 jobs globally and half of its model lineup as profits fall, in part because of high manufacturing costs at home.
The VW Group’s current U.S. market share is at around 4%, while Audi’s U.S. sales fell 17% in the first half of the year.
