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Volkswagen geared on improving US sales

Martin Winterkorn, Volkswagen AG’s chief executive wants to improve their U.S. sales to be able to keep up with its competition. In the Wall Street Journal online, the German automaker is said to price its vehicles more aggressively in the U.S. and lessen some features not approved by the American clientele.

These plans indicate Winterkorn’s new focus as well as the challenges that await him as CEO. Such action can add pressure to the U.S. auto market that has experienced a decline in sales.

The Wall Street Journal online also reports that Winterkorn is shifting from running Audi to the Volkswagen, which is geared on offering great features within reasonable costs. To be able to achieve the targeted one million cars by 2018, Winterkorn needs to re-evaluate the features on VW-brand vehicles in the U.S.

“We have definitely added too many technical items that (American) customers don’t want to pay for,” Winterkorn said. He also mentioned Volkswagen’s tendency to equip U.S. models with external mirrors that fold inward ideal for narrow streets and tiny parking spaces. “Who needs that in the U.S.? The streets there are so wide,” he said.

According to Winterkorn, by making Volkswagen cars more suited for the U.S. market, the German automaker can offer future versions of Jetta and Passat at a lower price. Presently the Jetta averages at about $17,000 in the U.S., while the Passat is about $23,900.

As many industry experts predict global demand to rise 12% to 15% by 2010, Volkswagen claimed it can increase its sales by roughly 30%, from about six million this year to eight million in 2010. Some are skeptical with this claim, but Winterkorn is fully confident even noting its possibility due to of a new, more centralized management structure that according to him allows quicker decisions.

Twelve more models are planned to be included in Volkswagen’s global lineup between now and 2010. Volkswagen is actually eager to bring in more vehicles in new segments, just like the new compact sport-utility vehicle called the Tiguan.

“We of course hope to take [customers] from the Japanese and surely the Americans, Winterkorn said. Volkswagen is currently considering on building its first plant in the U.S. after losing more than €2.5 billion ($3.5 billion) in North America over the past five years. Considering the strong value of the euro against the dollar, it has proven that importing cars from Europe is costly. “We want to illustrate that we take the U.S. seriously,” Winterkorn added.

This entry was posted on Friday, October 19th, 2007 at 7:36 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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