DETROIT -- Volkswagen AG's new mid-sized sedan designed for the American market will carry the Passat name and offer an optional diesel engine.
VW is counting on the diesel option -- a 2.0-liter turbocharged TDI four-cylinder clean diesel with 140 hp -- to be one of the most competitive features of the new Passat. It is expected to have a highway fuel economy rating of 43 miles per U.S. gallon (5.5 liters per 100km) -- the second highest of any vehicle sold in the United States after the Toyota Prius hybrid, VW says.
The Jetta sedan diesel has a highway rating of 42 mpg (5.6 l/100km).
While many Americans have failed to embrace diesel engines, VW is counting on a new generation of clean diesel engines to meet more stringent fuel economy standards.
The diesel engine will also make the Passat more competitive with hybrid versions of the Toyota Camry, Ford Fusion and Hyundai Sonata.
The new Passat will be built at VW's new $1 billion plant in Chattanooga, Tennessee, and will go on sale in the third quarter with a starting price of about $20,000.
It is the first car that VW has assembled in the United States since the 1980s, when the company operated a plant in Pennsylvania.
The base price of the new sedan is about $7,000 lower than the smaller 2010 Passat sedan that was discontinued in the U.S. market last year.
“It is the first German car delivering accessible German engineering to the mid-size segment,” Toscan Bennett, vice president of product marketing strategy for VW, said in an interview Sunday.
The Passat is expected to be one of the key drivers in VW's goal to sell 800,000 cars in the United States by 2018. VW sold 256,830 vehicles in the United States last year, up 20 percent from 2009.
Bennett would not provide sales forecasts for the Passat but said that the car, along with the smaller new generation Jetta that debuted late last year, will be key vehicles for building volume.
Last year, VW sold 123,213 Jettas in the United States.
Size is key to appeal
The new Passat is sized to compete with the segment leaders -- the Camry and the Honda Accord -- said Bennett. VW did not provide interior dimensions but claims it is the “best in class” for rear legroom.
In addition to the diesel, the Passat will be available with two other engines. The base model will feature a 2.5-liter, five-cylinder with 170 hp and a five-speed manual or six-speed automatic transmission. VW's VR6 six-cylinder, the same engine as in the Touareg SUV, with 280 hp and mated to a DSG dual clutch transmission, will also be offered.
The 2012 Passat will also feature VW's three-year/36,000 mile free-scheduled maintenance program.
Name has equity
Bennett said VW decided to use the Passat name because of the equity it has in the name. In its final year, VW sold 12,497 Passat sedans and station wagons, an increase of 12 percent over 2009 but at a volume well short of the segment's leaders.
At its peak, the previous Passat -- which was discontinued in the U.S. market after the 2010-model-year -- racked up sales of more than 100,000 units in 2002. By comparison, Toyota sold 327,804 Camry models last year.
But Passat sales declined as the competition grew in size. The base price of about $27,000 also made the vehicle uncompetitive, Bennett said.
“The Passat name has been around for more than 30 years, we have tremendous and positive brand equity with that. We have positive recognition and positive association with it,” said Bennett.
The 2012 Passat built in the United States will not be exported to Europe but sold only in North America. A version of the car will also be built in China. VW said a station wagon derivative of the new Passat will not be built.
VW expects to produce 56,000 Passats at the new factory this year, said Frank Fischer, head of the Tennessee factory.
By marketing different Passats in different markets, VW is undertaking a new “global approach” with a sedan and wagon equipped with powertrains “tailored to the European market,” and the new model primarily aimed at the U.S., said Bennett.
The new generation European Passat was introduced at the Paris auto show last year.