VW Reorients Its US Operations in Wake of Crisis

Maker invests $7B in products, plants.

by on Sep.14, 2016

VW's North American cheif Hinrich Woebcken said the automaker is committed to the U.S. market.

Volkswagen of America’s new boss is confident the automaker can and will rebuild its North American business in the wake of the emission-cheating scandal.

The scandal has cost VW billions in fines and settlements, cuts sales substantially and left many of the company most loyal customers with vehicles that lost value and require major repairs.

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Hinrich Woebcken, who took over the role of president and chief executive of VW Group’s operations in North America this past winter, said during a session with reporters at the preview of Volkswagen’s 2017 model line that Volkswagen has prepared a plan for a comeback in the wake of the company’s disastrous emission cheating scandal.

“We came into a crisis with this diesel engine,” said Woebcken. “We are really working to get this straight.

“We remain fully committed to the U.S. market. We need to stay in the North American market,” said Woebcken, who noted that in addition to spending $15 billion on the fines and settlements in the emission scandal, VW will spend another $7 billion on upgrading its North American operations.

(VW engineer helping with diesel investigation. Click Here for the story.)

The upgrade includes new products such as the Golf Alltrack Sport Wagon, a new SUV code-named Cross Blue and a new Tiguan.

“We are busy ramping up for the new SUV. I’ve already driven the prototype. All three of the vehicles will be in showrooms by the middle of 2017. Beyond that there is also a new Jetta in product pipeline,” Woebcken said.

Woebcken said Volkswagen also is moving away from what he described as a reliance on what was basically a compact-car strategy to one that is more family oriented, which is more in keeping with preferences of American consumers.

(Dealers latest to settle. Click Here for details.)

At the same time, VW plans to hold on to the elements that have always made it seem “cool and smart,” he said. “This brand has the very special element of being different,” he said.

Woebcken also told reporters that the VW Group has re-organized its operations in North America. The re-organization is keeping with VW’s plan to make its of its major regions more independent. China, Volkswagen’s largest market, is more independent because of the governance structure that requires the company’s ventures in China to have Chinese partners.

The new “governance” in North America give his operations more independence and the opportunity to get closer to American customers.

(Despite retreat by some makers, diesel isn’t dead yet. Click Here for the story.)

At the same time, VW Group has given its North American operations more leeway in product design. The engineering next generation Volkswagen Passat, for example, will be finished at VW’s expanded engineering center in Puebla, Mexico.

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3 Responses to “VW Reorients Its US Operations in Wake of Crisis”

  1. Bill Malcolm says:

    VW lives in constant denial of reality, it seems to me. This Woebcken fellow replaced the previous guy who skipped out of the US overnight last winter when it looked like he was going to be subpoenaed by the Senate. At least he was brighter than this Liang guy who was responsible for VW diesel emission performance calibration and lives in California and got arrested last week. The indictment came out yesterday and it’s an eye-opener. VW and Liang are accused not only of cheating on the diesel issue, but continually lying about it year after year in meetings with the EPA to renew certification for each following model year. A more ethical lot would be hard to find. Ahem.

    The fix for the diesel NOx problem in Europe is obviously a scam approved by the KBB (Transport Authority in Germany), because the EPA and CARB have rejected VW’s lame proposal for fixes twice, which led to the current buyback.

    I do not think there is an economical way for small diesels to co-exist with the NOx regulations – it’s all pie-in-the-sky dreaming, no matter the manufacturer. Mazda haven’t figured out a way for example, and all the tests in Europe show that Opel and Fiat and Renault diesels can’t hack it. Might as well get into gas hybrids, which actually do work.

    As for VW, anything they announce at the moment can be equated with Dr J Colis Browne’s Magic Elixir & CureAll as sold from the back of prairie wagons back in the Old Wild West when the traveling circus came to town, at least from my point-of-view.

  2. Fred says:

    So they are closing the current US design center, opening a new one in Malibu that will focus on Audi more than VW, move engineering to Mexico, and will no longer have the diesels which have been arguably their best bait for the “German Engineering” seekers they advertise to. It doesn’t sound good. I know I’ll be going back to the [used] Mercedes diesels I’d driven for 30 years until my 2014 Passat caught my eye when MB hadn’t made a good US diesel. Sorry VW.

  3. Steve says:

    Just bring over the Polo and all will be forgiven!

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