Winterkorn said “the Volkswagen Group has finally arrived as a local manufacturer in the United States.” Well, VW previously had a plant in Pennsylvania that produced the Rabbit, and it had announced plans for another plant in Michigan. Memories of both have faded along with the snows of yesteryear.
A new Volkswagen Group plant in Chattanooga, Tennessee was officially opened today by Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen. Volkswagen is investing about $1 billion in the development of the facility in an attempt to once again become a major brand in the U.S. market – something it hasn’t done since the original Beetle went out of production.
VW’s ambitious plans promise that one million new generation U.S. built Passat models will be sold during next seven years after cars arrive in dealerships this summer. The plant also appears to be a good choice for building a new Audi model.
Passat is part of a grandiose VW plan to sell 800,000 VW models annually in the states by 2018 – 1,000,000 with Bentley and Audi included. In the U.S., all VW Group brands delivered 360,300 units during 2010, corresponding to growth of 20.9% – but a long way short of the goal.
The VW brand sold about 257,000 of those units, its best year since 2003 with only a little over 12,000 of the sales comprised of old model Passat sedans. Since 1987 more than 700,000 Passat sedans have been sold in the U.S. The Japanese Big Three sell that many of their similarly sized family cars – Toyota Camry, Nissan Altima, and Honda Accord – each year. VW’s U.S. market share is now a mere 2%. The plan calls for 6%.
The new Passat is larger, with a length of 191.7 inches (4,868 mm), wheelbase of 110.4 inches (2,803 mm); and a width 72.2 inches (1,835 mm). VW is making much of rear seat room. VW is also taking a page from the original Japanese play book, most recently used by Hyundai on its Sonata sedan, by cutting the price of the new Passat, which will start under $20,000 – a relative bargain given its size.
The base Passat has a powerful (170 hp/177 lb.-ft.) five-cylinder gasoline engine. Engine options include a four-cylinder turbocharged diesel (TDI) with (140 hp/236 lb.-ft.), which could pass 40 mpg on the highway when EPA testing is complete, and a six-cylinder, gasoline fueled VR6 with (280 hp/258 lb.-ft.), which should make it a very quick car around town.
But is quick enough to take on the well entrenched Japanese? It will be an expensive marketing challenge at VW that will need to overcome longstanding consumer attitudes about VW’s low quality, higher prices, and poor dealership service.
