It hasn't been an easy ride for Volkswagen -- at least not in the U.S., and not for the past several years. According to Bloomberg, however, the company is attempting to reverse its fortunes with a slew of new SUVs to lure Americans back to the brand.
While VW sub-brands like Audi and Porsche have continued to wow customers on this side of the Atlantic, the company's VW lineup has remained fairly lackluster (with an exception or two). And behind the scenes, VW has been fending off challenges that could hurt U.S. profitability -- namely, employee efforts to unionize in Chattanooga.
Because of those and other factors, VW's U.S. sales have been underwhelming. (At the end of April, the company's U.S. numbers were 10.4 percent lower than the first four months of 2013 -- a steeper drop than any other major automaker.) And although sales in some other parts of the globe have been strong, without the U.S., VW is going to have a tough time meeting its goal of becoming the world's #1 automaker by 2018.
SUVS SAVE THE DAY?
Part of VW's problem in the U.S. stems from its lack of SUVs. (At the moment, it only offers two -- the Tiguan and the Touareg -- neither of which have been big sellers.) Back in January, the company confirmed that a new SUV based on the CrossBlue concept would come to the U.S. during 2016, and according to a couple of unnamed sources, VW may add three more SUVs to the family before long.
That could be a very smart move for VW. Consultants at PwC say that demand for SUVs is growing: in 2012, they accounted for 17.6 percent of all vehicles produced, and by 2018, that figure could rise to 20.1 percent or higher. Furthermore, SUVs aren't just attractive to consumers, they're also good for bottom lines, as they tend to generate higher profits.
For this to work, though -- and for VW to achieve its goal of surpassing Toyota in deliveries within four years -- it'll need to do a much better job of (a) making its SUVs attractive to U.S. shoppers, and (b) differentiating them from one another.
That may not be such an easy task. Though the Tiguan and the Touareg are currently VW's only SUVs, they bear many physical similarities. Will VW be adding four more lookalikes, or will it do as Toyota has done and offer visual and other cues that help set models like the RAV4 and FJ Cruiser apart at a glance? Will the company offer more hybrids, or will it remain committed to diesels, which don't sell in volume in the U.S.?
We may have a few more answers to these questions soon: Bloomberg's sources suggest that a formal announcement is forthcoming.