Volkswagen aims to be the best-selling global automaker by 2018 and a central part of its plan to get there is the goal of boosting core-brand sales in the United States.
By 2018, the brand aims to sell 800,000 vehicles a year in the U.S. market, a level never attained in VW's 57 years of selling vehicles in the country. The brand sold 324,402 units in the United States last year.
The goal, set in 2008, is an important element in VW Group's bid to overtake General Motors and Toyota to become the biggest global automaker by 2018.
But what, exactly, will it take to get there? VW Group of America CEO Jonathan Browning and other executives have talked in general terms about improvements needed for VW's product lineup, vehicle quality, North American manufacturing capacity and dealerships.
Today VW's North American production and dealer network are sized for much smaller volumes. The brand hasn't sold more than 500,000 vehicles a year since 1971.
VW dominates in other regions of the world where it sells cars, but in the United States it was only the No. 10 seller this year through July.
Browning has stressed that the goal isn't only about volume; it's also about profitable, sustainable growth. VW also wants to lead the industry in quality, customer service and many areas.
But the company will need a major makeover of U.S. operations to transform the brand into one that's fit to rival the top sellers Ford, Chevrolet, Toyota, Honda and Nissan.
Based on comments from VW executives, dealers and industry analysts, VW will need to:
- Assemble more of its U.S.-sold vehicles in North America than it does now. As a move in that direction, VW opened a $1 billion plant in Chattanooga, Tennessee, last year and has enough land to build a second, mirror-image facility on the other half of the site. Audi's decision in April not to build its new factory there is telling; that empty land could be reserved for VW.
- Add a third-row SUV and develop more cars tailored to U.S. buyers. Already, three models have had U.S. makeovers: the U.S.-built Passat and two models built in Mexico, the Jetta and Beetle. Other models could follow.
- Increase per-store sales and add stores, especially in the central states where VW isn't heavily represented.
- VW has about 600 dealerships nationwide, far fewer than larger competitors have.
- Improve quality and reliability scores. The brand, while getting high marks on looks and appeal, has long sagged in these areas. VW has stepped up efforts to tackle its quality problems, but progress has been slow. In June, its ranking in the J.D. Power and Associates Initial Quality Study slipped a notch, to a tie for No. 29 out of 34.