Volkswagen plans to refresh its product line to better appeal to US drivers in order to jump start sales in a key market after seeing a strong spurt of growth sputter out last year.
The German giant saw its US sales fall last year even as the overall market expanded, underlining its weakness in the market for the pick-ups and sports utility vehicles loved by Americans.
The automaker used this week's Detroit auto show to announce plans to invest billions to introduce a much-needed midsize sport utility vehicle (SUV) and boost North American production.
Some of those fresh new products were on display in the Motor City, including a prototype of a sportier, off-road Beetle, the Dune.
But it will still be two years before VW gets its upcoming seven-seater mid-sized SUV into showrooms.
And the compact Golf, which recently made its debut and dominated the automaker's display in Detroit, is not expected to generate huge sales volumes.
"We need more models," VW's new head of US operations Michael Horn acknowledged.
VW is considering launching a smaller sport utility vehicle, Horn told reporters on the sidelines of the show. But so far it has no plans to enter the pick-up market.
"I don't even know if we have the expertise," Horn said.
It remains to be seen if the off-road Dune Beetle -- which comes with a ski rack and sweeping spoilers -- will be used to fill VW's small SUV hole or if the automaker will expand into a totally new model.
Audi, which like its parent VW also lacks a smaller urban 4x4, introduced a prototype of a compact but muscular two-door crossover SUV -- the Audi Allroad -- with a plug-in hybrid engine.
The Volkswagen brand's US sales fell 6.9 percent to 408,000 vehicles in 2013 even as the overall market grew by 7.6 percent amid strong demand for pickup trucks and SUVs.
As consolation, VW's luxury brands Porsche and Audi posted record sales that helped the group as a whole post a new record 611,700 delivers in 2013.
"Volkswagen has not focused sufficiently in recent years on launching new products adapted to the US market," Stefan Brarzel, director of the German analyst group CAM, told AFP.
"They have fallen behind on at least one revamp of existing models," added Frank Schwope, an analyst with the German bank NordLB.
To help make up for the shortfalls, the group will boost its investment in North America from the previous plan to inject five billion dollars by 2015 to a seven billion dollar investment by 2018.
VW is counting on the United States and China to help it reach its goal of becoming the world's largest automaker by 2018.
"The US is a cornerstone of our 2018 strategy," VW chief Martin Winterkorn told reporters Sunday.
After a difficult period which led VW to stop producing vehicles in the United States during the 1980s, the German auto giant opened a new plant in Chattanooga, Tennessee in 2011.
It has a capacity to build 150,000 vehicles a year and is currently building the Passat sedan.
The addition of this local production -- along with the Jetta sedan which is built in Mexico -- helped the brand double its sales between 2009 and 2012.
But this boom was cut shot.
"They were expanding enormously in recent years and they have consolidated their position," said NordlLB's Schwope.
It will be difficult for VW to meet its goal of selling a million vehicles a year in the United States -- 800,000 VWs and 200,000 Audis.
"This year will certainly be difficult again," added CAM's Bratzel, while Schwope concluded: "If they manage to make any profits they will be marginal."
Volkswagen plans to refresh its product line to better appeal to US drivers in order to jump start sales in a key market after seeing a strong spurt of growth sputter out last year.
The German giant saw its US sales fall last year even as the overall market expanded, underlining its weakness in the market for the pick-ups and sports utility vehicles loved by Americans.
The automaker used this week’s Detroit auto show to announce plans to invest billions to introduce a much-needed midsize sport utility vehicle (SUV) and boost North American production.
Some of those fresh new products were on display in the Motor City, including a prototype of a sportier, off-road Beetle, the Dune.
But it will still be two years before VW gets its upcoming seven-seater mid-sized SUV into showrooms.
And the compact Golf, which recently made its debut and dominated the automaker’s display in Detroit, is not expected to generate huge sales volumes.
“We need more models,” VW’s new head of US operations Michael Horn acknowledged.
VW is considering launching a smaller sport utility vehicle, Horn told reporters on the sidelines of the show. But so far it has no plans to enter the pick-up market.
“I don’t even know if we have the expertise,” Horn said.
It remains to be seen if the off-road Dune Beetle — which comes with a ski rack and sweeping spoilers — will be used to fill VW’s small SUV hole or if the automaker will expand into a totally new model.
Audi, which like its parent VW also lacks a smaller urban 4×4, introduced a prototype of a compact but muscular two-door crossover SUV — the Audi Allroad — with a plug-in hybrid engine.
The Volkswagen brand’s US sales fell 6.9 percent to 408,000 vehicles in 2013 even as the overall market grew by 7.6 percent amid strong demand for pickup trucks and SUVs.
As consolation, VW’s luxury brands Porsche and Audi posted record sales that helped the group as a whole post a new record 611,700 delivers in 2013.
“Volkswagen has not focused sufficiently in recent years on launching new products adapted to the US market,” Stefan Brarzel, director of the German analyst group CAM, told AFP.
“They have fallen behind on at least one revamp of existing models,” added Frank Schwope, an analyst with the German bank NordLB.
To help make up for the shortfalls, the group will boost its investment in North America from the previous plan to inject five billion dollars by 2015 to a seven billion dollar investment by 2018.
VW is counting on the United States and China to help it reach its goal of becoming the world’s largest automaker by 2018.
“The US is a cornerstone of our 2018 strategy,” VW chief Martin Winterkorn told reporters Sunday.
After a difficult period which led VW to stop producing vehicles in the United States during the 1980s, the German auto giant opened a new plant in Chattanooga, Tennessee in 2011.
It has a capacity to build 150,000 vehicles a year and is currently building the Passat sedan.
The addition of this local production — along with the Jetta sedan which is built in Mexico — helped the brand double its sales between 2009 and 2012.
But this boom was cut shot.
“They were expanding enormously in recent years and they have consolidated their position,” said NordlLB’s Schwope.
It will be difficult for VW to meet its goal of selling a million vehicles a year in the United States — 800,000 VWs and 200,000 Audis.
“This year will certainly be difficult again,” added CAM’s Bratzel, while Schwope concluded: “If they manage to make any profits they will be marginal.”
