New Plant Could Help VW Triple U.S. Sales

May 20, 2008
These have been tough times for Volkswagen of America. After a huge burst of growth during the 1990s, the automaker has struggled to reverse a sharp downturn during the first decade of the new millennium. To rebuild momentum, the automaker has been counting on an onslaught of new products, such as the compact Tiguan SUV, upgraded older models, noticeable improvements in quality, and a move to a new U.S. headquarters in the suburbs of Washington, D.C.

Now, the automaker hopes to put in place another critical building block, opening its first U.S. assembly plant in a quarter century. The automaker is known to be narrowing down a list of potential sites, though so far, it’s declined to provide many clues to the search process – or timing.

But there’s little doubt VW wants and needs to move fast. The weak dollar is punishing all European manufacturers. But while high-line manufacturers, such as Mercedes-Benz, can swallow some of their exchange rate-related losses, things are much more difficult for a mainstream maker, such as Volkswagen. So shifting some of its production to an American base could mean the difference between red and black ink. It could also help rebuild the company’s reputation with consumers.

The new plant could play a significant role in helping VWoA triple its current sales volumes over the next decade, suggested Tim Ellis, vice president of marketing. It would add an additional source of vehicles, reduce manufacturing costs, and, noted Ellis, help appeal to customers who’d prefer products manufactured in the United States.

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