Volkswagen outlines big plans for U.S.

Emily C. Dooley, Richmond Times-Dispatch
and The Associated Press
Published: March 8, 2008

WASHINGTON—Volkswagen plans to more than triple its U.S. sales in the next decade through aggressive marketing and by taking advantage of growing demand for clean diesel fuel.

Stefan Jacoby, chief executive of Volkswagen Group of America, said yesterday that his goal is to sell 1 million vehicles annually by 2018—800,000 from the Volkswagen brand and 200,000 from the Audi brand.

That would be a sharp increase from 2007, when the company sold 235,000 Volkswagens and 94,000 Audis in the U.S. In 2002, the company sold 338,000 Volkswagens in the U.S.

Volkswagen AG is the fourth-largest automaker in the world, but in the U.S. it controls only 2 percent of the market.

The German company has made the U.S. market a top priority and is overhauling operations here. Its North American headquarters are moving next month from suburban Detroit to Northern Virginia—a move the company says brings it closer to its East Coast customer base.

About 120 workers from Michigan will be transferred to Herndon and 250 others will be hired over time, said Jill Bratina, Volkswagen’s director of corporate communications. Employees will begin moving into the facility next month.

The company also is considering establishing its first production plant in the U.S. In informal remarks to reporters, Jacoby said a location has not been chosen but that “we will have that facility here in the U.S.“

He later backed off those remarks, saying he was not prepared to definitively announce that Volkswagen will build a U.S. plant.

George Hoffer, an economics professor at Virginia Commonwealth University, said there have been reports that the automobile manufacturer bought land and planned to build near Rocky Mount, N.C.

If that were case, he said, it would possibly open the door for Audi to open an operation in Virginia, as the automakers share similar parts.

But Bratina said there had been no such purchase. “A location has not been chosen,“ she said.

In his speech at the National Press Club in Washington, Jacoby said he believes Volkswagen is well-positioned to take advantage of an anticipated increase in demand for cars with diesel engines. He cited a J.D. Power study predicting that the diesel car market will increase from 3 percent to 7 percent of the U.S. passenger vehicle market by 2012..

“Diesel is back,“ said Jacoby. “We see clean diesel at a tipping point.“