VW Growth in the US is Not Guaranteed
It's a question I hear from Volkswagen fans all the time. Don't you think VW is ready to come on strong again in the US?
My answer, which usually disappoints people, is the usual, "Well, VW is giving it a better shot this time around, but let's see if it can truly come back here in the States."
I'm reminded of this because of a column by Neil Winton in today's Detroit Newswhich quotes a new research note out of Europe that predicts a long road to growth for VW in the US. The note by Bernstein Research auto analyst Max Warburton essentially says VW will get just an incremental return on its investment ($1.4 Billion) to expand in the US. To be clear, Warburton and others who have speculated on VW's growth prospects in the US are not sure how the German automaker will do over the next 4-5 years here in the States. Still, the point of the note is one with considering, especially as the new Beetle rolls into showrooms.
This year, VW sales in the US are up 21.7% (overall US sales up 9.9%) and the brand has more momentum than it's had in years. With the new plant in Tennessee starting to crank out the Passat and a commitment to design and build cars Americans want, it's easy to see why there is so much optimism about VW right now.
But the Bernstein report makes an important point: it will take time for the new VW plant in Chattanooga to reach the quality standards that are expected. And as we all know, VW has struggled with quality in the US for some time.
Is it possible that four years from now VW will be on a roll in the US? Absolutely. I like what I'm hearing from Jon Browning and his commitment to push cars Americans want. For too long, these guys were lost in the States because they thought that what worked in Europe would automatically work here. Now, with a new plant and new models on the way, VW could finally make a charge. I'm not sure the German automaker will triple sales by 2018 and hit its goal of selling a million Volkswagen and Audi models annually. Like I said, VW is giving itself a shot to grow in the US, but I want to see results before I buy into its comeback.
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