What is VW thinking? Phaeton may come back to US market, no more US plants.

BY GERRY MILES

An interesting piece of PR mail landed in the in-box just now. VW, wait for it, MAY bring back the Phaeton to the US market later on this decade. Yup, this decade, like 2018. After being roundly excoriated for such an opulent non-plussed expensive sedan produced from the firm that originally built “the people’s car” and sagging sales, it went quickly into the dark night.

Part of it has resurfaced, its huge engine sits under the bonnet of most Bentleys in what a friend calls Bentwagens, and another unprintable term for the unwieldy combination of a British-German car given past World War history and all, but as he is won’t to say, no one listens to him.

Volkswagen Group of America President/CEO Michael Horn told Bloomberg’s Matt Miller at the NY Auto Show that they won’t build any more plants in the USA, the Phaeton is slated for a comeback and small market pickup trucks aren’t likely. The excerpts are below but you can watch the interview if you click on the link here.

Highlights:

On whether bringing a German back to run VW Americas is a sign that VW America need to get more efficient and more organized:

“No, not at all.  I think it is more a sign that we need to connect closer from the American market to the German market.  And since I know the German company for more than 20 years, I think I’m very — I have a lot of value added to explain the American demand to the American customers to our German entity.  And I this is the most important reason for them to bring me over here.”

On his plans for VW America:

“Well, first of all, we will be very close to the dealer network.  That is very important.  If you look at the NADA results last year, and most probably also winter, which will be published pretty soon, the dealers are not happy because they do not earn enough money.  And then they send a great distance to the company, both in Hern (ph) and in Wolfsburg.  And so we have been working very hard with dealer council and the dealers to get this reconnection and lots of different things on the bonus programs on tier 2 marketing, on service loaner cars.  And our overall approach to talk together again as partners.  This is very important to get the dealers engaged.”

“And the second big thing is product.  And we start with the Golf and with the Jetta.  Next year is the Passat.  It will be a new Passat, maybe even all new.  So we have to see on whether this is possible. And then we’re going to see the next step when the two SUVs are coming, the Passat SUV and the compact SUV.  So we’re working very hard not only on bringing cars to the market, but with all the accessible features, what we talked about, all the exterior designs, and to go from there.”

On whether he is aiming to make VW more of a luxury brand in North America:

“No, not at all.  My experience is more than 20 years with the brand Volkswagen, and I had a short time, two or three years, introducing the Phaeton and the Touareg, which was an interesting experience.  Very good experience, but I am a people’s car guy. As I come from Golf, I come from Jetta to the top and so we definitely don’t want to position the brand upwards, but we want to make it even more mainstream and to conquer volume.”

On whether he is looking to bring the Golf and Jetta into the North America mix more:

Jetta is our best selling car.  So we sell roughly 150,000 Jettas in the U.S., 120,000 Passats.  And the Jetta is very important because it’s a long-term big seller here for us.  And so for us, it is very important now to continue our value story because we refreshed the Jetta from the outside.  It’s going to be very good-looking, very nice, more sporty and more dynamic because we lowered, we widened it.  The interior is eased up quite a bit.  We seat tubes inside and we will have the value story on the Jetta.  So we moved the acceptable, high-premium features like rearview cameras, like all the collision warning systems, we moved them down to make it more accessible.  We don’t talk about pricing yet, but it will not just look nice, and will be totally renovated also in terms of technology.  We have new engines, a new diesel engine, V8, 288 and the 1.8 turbo, which you know.  But they will be more fuel efficient, 10 percent, roughly, highway miles per gallon, average miles per gallon.”

On what Americans want:

“The Americans pretty much want to have everything starting from the base.  You want it all and you want to have great and nice-looking cars also from the base, so not differentiate too much the lines from the outside small chrome, small price, pick from the price.  And that is what we are working at.  And you would see this also with a Jetta.”

On whether the Chattanooga factory is making cares for the rest of North America: “Yes.  And we even export cars to Korea. So it is a North American car and the car gets being exported to some of the Asian markets, not to China.”

On whether there are any plans to build more factories in the U.S.:

No, I think that from this location, it is pretty much set up what we have in Mexico, what we have in Chattanooga and then we have more opportunity to grow the business there.”

On whether the Phaeton is coming back to the U.S.:

“Yes we plan to bring it back somewhere in 2018, 2019”

On whether VW will sell pickup trucks in the U.S.:

“No, it’s the emerald.  We built this in Argentina.  I checked one of our plants over there.  And even in Hanover, but it’s very small.  It is much smaller than the F-150.  And the technology and the engineering is a little bit too expensive from our point of view for the U.S. markets.  So if we would want to – if the SUV market, SUV segment here – we would really need to do something different.”

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