VW Adds Jobs, Raises Expectations for Sales in US

Phil LeBeau | @Lebeaucarnews

Published 12:23 PM ET Thu, 22 March 2012 CNBC.com

After years of fumbling to find its way in the U.S., Volkswagen has hit its strideand is ramping up production to keep pace. The German automaker is hiring 800 workers and adding a third shift at its plant in Chattanooga, TN. The expansion means Volkswagen will hire 1,000 workers in Tennessee by the end of this year.

“This is really another phase of VW’s growth strategy in the U.S. part of an overall $4 billion investment program, new plant, new products, new infrastructure,” said Jonathan Browning, CEO of Volkswagen of America.

Source: vw.com

2012 Volkswagen Passat

The expansion is needed to keep up with soaring demand for the new Volkswagen Passat.

The redesigned mid-size car has been a huge hit since its introduction last year. Browning thinks Passat and auto sales overall will continue to move higher this year. “We believe there is some good momentum. Consumer confidence is coming back into the car buying sector,” said Browning. “This is a great time with high residual value, low interest rates and some great new products.”

Volkswagen Investing in America 11:10 AM ET Thu, 22 March 2012

The soaring sales and plant expansion are a testament to the VW strategy of finally designing and building cars targeting Americans. For years, Volkswagen would have a hit car followed by years of lagging sales. A big part of the problem was VW’s approach to the U.S. It used to design cars geared to European buyers and then try to sell those models here in the states. Occasionally it worked, but for every hit model like the Beetle, there were major missteps like the luxury model Phaeton.

This year, Volkswagen U.S. sales are up 36.6% with a growing percentage of those being TDI diesel models. The cost of diesel ($4.11/gal) has been moving up in tandem with regular gas. Still, Browning thinks VW diesel models are becoming more popular because they offer greater fuel efficiency, “As more Passat’s come into the market with that TDI diesel we think that will continue to grow to about 1 in every 4 of our sales.”