Hinrich J. Woebcken and the case of the two VW Tiguans

March 10, 2017

Hinrich J. Woebcken smiles early in the morning, even though he might not have much reason to.

It’s early at the 2017 Geneva motor show. The next 24 hours will be a grueling combination of endless interviews, internal meetings, and if he’s lucky, a break for currywurst. He wolfs down an ad-hoc egg muffin before he speaks.

Woebcken is CEO of Volkswagen's North American region, brought in as a hasty replacement for Michael Horn in early 2016 when the company's diesel-emissions scandal still was unfolding.

In the span of three years, VW had built a factory in Chattanooga, had begun building Passat sedans, and had ramped up for production of its new Atlas SUV in America. Both vehicles depended on diesel to account for a significant portion of sales.

That plan hit a regulatory wall in September of 2015, when VW was found to have evaded diesel emission standards with code-cheating software. It had touted technical expertise in delivering the best-performing, cleanest diesels on the market. It had lied.

Now Woebcken's been charged with reviving the brand after the ensuing scandal derailed the company's long-term plans for diesel-powered vehicles in America.

Hinrich J. Woebcken

Hinrich J. Woebcken

It's no small task, but this is a happy guy. Woebcken talks frankly about how VW had a 25-percent market share of diesel-powered vehicle sales before the crisis, which he refers to regularly as “the disappointment.”

Last year, he says, VW stabilized the sales bleeding caused by the abrupt halt in diesel sales. So far this year, VW has managed slight sales increases over 2016 numbers.

He takes that as a good sign.

"Obviously the brand is not only diesel," he says. "The brand has a lot of assets, and potential diesel buyers kept buying Volkswagens."

Woebcken's chief task, since taking over from Horn, has been to continue the charm offensive that's kept dealers in the fold as they process thousands of claims for buybacks. The company has been able, he says, to convince dealers that better days are right around the corner, as VW moves away from diesels, toward a more mainstream product lineup.

That lineup will hinge on a pair of new crossover SUVs it will add this summer to its utility-starved lineup: the bigger, American-made 2018 Atlas, and the compact Mexican-built crossover it will sell as the new 2018 VW Tiguan.

2018 Volkswagen Tiguan

2018 Volkswagen Tiguan

2018 Volkswagen Tiguan

2018 Volkswagen Tiguan

2017 Volkswagen Tiguan

2017 Volkswagen Tiguan

2017 Volkswagen Tiguan

2017 Volkswagen Tiguan

The case of the two Tiguans

This year VW will add two new crossovers to a lineup that already counts a pair of older SUVs.

The current VW Tiguan has been in its lineup since the 2006 model year. Woebcken says for the time being, it's not going anywhere. At the Geneva show, he confirmed VW will continue to sell the old model next to the new model, which arrives in July.

“We believe the A-SUV segment is so strong, so solid, there is space for two Tiguans,” he says.

VW may make the relationship between the two vehicles obvious with additional names, as Nissan has done with its Rogue and Rogue Select and Rogue Sport models.

MORE: Read our 2018 VW Tiguan preview

The older Tiguan will be positioned as a less expensive model, but will add updated infotainment features, though its lackluster crash-test performance likely won't be affected.

The older model still will be imported from Germany, while the new model is manufactured in Mexico, at VW's massive Puebla assembly complex.

The new Tiguan brings with it a much larger package and an available third-row seat. It's nearly a foot longer than the older model, and sports a 184-hp turbo-4 and an 8-speed automatic, with a choice of front- or all-wheel drive.

The arrangement, Woebcken says, will be in place for “several years...not only for one model year, for several model years.” It gives VW time to field an entirely new small SUV, which could adopt the size and shape of its recent T-Roc concept.

MORE: Take a ride with us in the 2018 Volkswagen Atlas

Before the Tiguan arrives, Volkswagen will have the Atlas, a new three-row SUV that's been in its plan since it built its Chattanooga assembly plant.

The 2018 Atlas arrives in May, with three rows of seats and a starting price of about $30,000, which rises to $48,000 for the fully loaded V-6 models.

VW is considering adding a derivative of the Atlas, but Woebcken won’t elaborate.

Elsewhere in the lineup, VW has its Golf wagon and the high-riding Alltrack version of that SportWagen. The latter is all but directly aimed at Subaru, which seems to have benefited the most from VW's diesel troubles.

Still hanging on is the Touareg, VW's biggest SUV and its slowest seller. Woebcken says it's in a different segment than the Atlas and will stay in the lineup for now, but hints a replacement is in the works to keep a premium SUV on the showroom floor.

Going full-bore SUV, but still into cars

Woebcken says VW is on the cusp of changing how people perceive the brand, thanks to the Atlas. In the past, he says, it's been known more as a small-car company, thanks to its Golf and Jetta compacts.

"Our sales mix is only 10-12 percent SUVs," he says. "We are now shifting the brand into a much more family-friendly, SUV-oriented brand."

It's in recognition that SUVs aren't going anywhere, and that the U.S. has led the way in shifting its fleet to trucks. In the past, when fuel prices climbed, buyers moved back into more efficient cars—but that's no longer the case. The gap in efficiency with the new generation of crossover SUVs is slim, and drivers don't want to give up the extra space and functionality.

The math is simple. The U.S. market is 60 percent trucks, 40 percent of which is crossovers and SUVs. With a four-SUV lineup, VW can offer its own customers a way to move up in size, without leaving the brand.

That doesn't mean VW is leaving behind its bread-and-butter cars.

“We all see the shift into SUVs, but sedan sales are huge,” he says. Woebcken says VW dubs 2017 as its year for SUVs—and 2018 will be a year of sedans. A new Jetta arrives in 2018, along with the Arteon unveiled in Geneva. A new Passat is due in 2019.

Details are few on those new vehicles, but the Arteon will have what he says is a "fantastic seating position in the back...not squeezed in like a coupe.” It will ride on a longer wheelbase than the next Passat, which is expected to come from the MQB platform also underpinning the Golf and next Jetta.

Volkswagen Group Sedric concept, 2017 Geneva auto show

Volkswagen Group Sedric concept, 2017 Geneva auto show

Dieselgate: the beginning of the end?

One reason for Woebcken's smile might be the beginning of the end of the company's disastrous diesel-emissions scandal. It will be years before the full impact of VW Group's EPA cheating will have a final pricetag, but today, Woebcken says VW of America has bought back 160,000 cars, and has made offers to buy back a total of 250,000 out of an estimated 400,000 involved vehicles. 

Some buyers will be able to fix and drive their VW diesel vehicles in the future, but for the vast majority of the out-of-compliance diesels, the future is the scrapyard.

Woebcken says just getting to this stage has begun the process of regaining trust with shoppers, but the reputation cost has been painful.

It has had one useful effect: it has ended VW's hopes of hinging its corporate image on diesel.

VW is done with diesel, at least in America, he says emphatically: "We don’t have a plan to bring back diesel. Period."

Diesel's future has diminished at the same time as battery technology and cost have made electrified vehicles a reasonable alternative. Global emissions standards would have cost VW billions in compliance, anyway.

"It makes much more sense to take that money and throw it into the future, hybridization and electrification," he explains.

Volkswagen Group Sedric concept, 2017 Geneva auto show

Volkswagen Group Sedric concept, 2017 Geneva auto show

VW’s future is electric, self-driving

Dieselgate has in fact galvanized VW, pivoting the company sharply into the electric-car arena.

Woebcken lays out an EV future that starts in 2020 in the U.S. with a range of electric cars, all built on a new "MEB" architecture. From hatchbacks, to crossovers, to sedans, the MEB platform will be built and sold around the globe.

That economy of scale available to VW give it an edge, Woebcken believes, in taking a significant share of the 1.5 million electric-car sales expected by the 2025 model year.

Today's demand for electric cars is nowhere near that level, but he believes the introduction of self-driving cars and other advanced technologies will lure buyers into vehicles.

MORE: Read about VW's Sedric self-driving car concept

“For years we have not really seen demand or business economics, [but] it will come," he says. "We are in front of the tipping point, I am 100 percent convinced.”

Woebcken has a day to be filled with more pointed legal questions about diesel scandals, about having to catch up with electric cars and self-driving cars, about why there’s still no VW Bus.

And yet he’s still smiling. VW is turning the corner in America, he says. Regaining trust comes first, in lockstep with great products. VW has them both on the horizon, Woebcken is sure, and his company will thread a series of needles expertly.

“At heart," he says, "I’m an optimist.”

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