Volkswagen chief: VW is done with diesels in the U.S.

November 23, 2016

If you're an Audi fan, you were probably sad to learn that your fave luxury brand plans to offer just one diesel model in its U.S. lineup. But buck up, kiddo: that's one more than fans of Audi's mass-market sibling, VW, will have to choose from.

That news comes from someone with intimate knowledge of VW's sales plans: Herbert Diess, VW's global brand chief. It ends a great deal of speculation about the future prospects of diesel vehicles--specifically those made by Volkswagen--in the wake of the Dieselgate scandal.

That speculation has been fueled by VW's unwillingness to say whether or not it plans to re-launch diesel sales in the U.S. Over the summer, VW's North American head honcho, Hinrich Woebcken, said that diesels were down but not completely out, and in September, he still refused to admit defeat--though he did note that "Regulations have made diesel harder to do in the U.S. market."

Last week at the Los Angeles Auto Show, Woebcken hedged his bets a third time, saying only that he doubted diesels would play as big a role in VW's American lineup as they had in previous years. (Once upon a time, diesels accounted for roughly one-quarter of VW's U.S. sales.)

Now, however, it appears that the argument is settled. 

Instead of dithering over diesel--something that Audi of America President Scott Keogh has called a "bridge technology"--VW will spend the next several years preparing for a brighter future. Part of those preparations will no doubt involve a massive rebranding campaign, aimed at rebuilding VW's battered, bruised reputation.

However, the company will be involved in more than mere reactive damage control. The Dieselgate crisis has given VW a unique opportunity to evaluate its missteps in America--missteps that led to declining market share long before the company's emissions-test-cheating defeat devices became front-page news. From those evaluations, the company appears to be forging a plan to become a dominant force in the U.S.

For starters, it's revamping its lineup to match American tastes. Instead of relying so heavily on cars, VW is developing crossovers like the all-new Atlas, which could pull focus from longtime U.S. favorites like the Ford Explorer and Jeep Grand Cherokee. It's also developing light trucks and electrified vehicles. Some 30+ of the latter are expected to be in showrooms by 2025, and many of them will begin rolling out in 2021.

All of which is pretty exciting until you realize that 2021 is still five years away. What's VW to do in the interim? Will it be able to tread water until help arrives, slashing prices on models and carrying out a global charm offensive to win back consumers? Or does it have even more tricks up its sleeve? Stay tuned.

Note: for purposes of clarity, "Volkswagen" has been used to refer to the Volkswagen Group parent company, while "VW" has been used to refer to the company's popular mass-market brand of automobiles.

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