April 19, 2024

Wade Through Films

The Ultimate Driving Machines

Editor’s letter: why there’s no Dieselgate hangover for VW in the US

Why we picked Joe Manchin, Elon Musk as All-Stars

It was the US where the Dieselgate scandal all began for the Volkswagen Group. The pack of cards began to fall back in September 2015, when US authorities served notice on the company for breaching the Clean Air Act.

Billions of pounds in compensation and a whole generation of executives later, VW – far from its reputation having permanently tanked stateside – is on the rise in the US once more.

“In the US, you fall and you get punished hard,” said VW boss Thomas Schäfer. “And you get up again. They [Americans] love a story of getting up again and making the company a better company.”

Pre-Dieselgate, VW’s sales in the market topped 467,408 in 2012, although this had slipped back to 366,970 in 2014 before the crisis. Indeed, that drop in those two years was far greater than the dip caused by Dieselgate; sales bottomed out at 322,948 in 2016, and not even the pandemic made much of a blip in a wider upward trend.

The goal for the VW Group is to have a 10% market share of the non-pick-up market in North America by 2030 and, as the volume brand, VW will take the bulk of that. This could translate to a figure of up to one million sales, which is some leap on today.

Its strategy is to make more cars for America in America – the likes of the Jetta, Tiguan LWB, Atlas, Atlas Cross Sport and Taos – and building its range to include two differently positioned cars in each of the biggest four segments (eg the more spacious seven-seat Atlas and the sleeker five-seat Cross Sport both in the mid-size SUV class), excluding pick-ups.

It has backed this up with a $7.1 billion investment in its production facilities and R&D, a figure that includes the production of electric cars, where the future eventually lies even in the US. The first step of this is the ramp-up of local production of the ID 4.

“VW is in the strongest position ever in America,” said Andrew Savvas, chief sales and marketing officer for VW of America, a position he took up earlier this year having previously been VW boss in the UK. He is most encouraged in the present by the very short time VWs are currently sitting in stock on dealer forecourts, an area where VW is outperforming the market.

Cars in the US are bought differently, from stock on forecourts rather than a bespoke factory order. “You wake up on a Saturday morning and decide you want a new car,” said Savvas. “Customers will walk away – it will cost you sales – if what they want is not in stock. No red one? They’ll go next door.”