This week we could finally hear the location where Volkswagen plans to open a new assembly plant here in North America. Huntsville, Alabama is considered to be the favorite, but the fact is the only location that really matter is North America.
This announcement will bring VW closer to re-establishing itself in the U.S. I know, the company hasn't gone anywhere, and it's always been selling cars and SUVs here in the U.S. But this is different. This is a true endorsement that it needs to go further and do more to take advantage of the world's largest auto market.
Just a few years ago, VW's commitment to the U.S. was very much in doubt. The product line-up was stale, the marketing included desperate attempts to be hip, and frankly, you got the feeling VW could care less whether or not it was player in this market. Consider this. Between 2002 and 2007, VW's annual sales dropped by roughly 100,000 vehicles, or 23%. It capped a 5 year period where the German automaker's sales did a slow and steady decline. But that could be changing.
With smaller, more fuel efficient cars back in favor, VW's sales this year are down just 0.4 % and the Tiguan is off to a decent, if unspectacular start here in the U.S. For a company that has been floundering, that's not bad. And the encouraging thing for VW, is that this may be just the start of a comeback.
In addition to squarely being more intent on giving U.S. buyers the vehicles, they want, the company's new assembly plant will also give the firm a greater footprint in this country. Yes, I know that VW's decision is in large part based on manufacturing costs. But as anyone in the auto business can tell you, if you want to do your best in a particular market, it helps to build in that market.
VW is an unusual brand. When other automakers have drifted and become less relevant, their brand appeal almost always has suffered. But VW continues to have a large and loyal group of fans. How many of those are people who want to buy a VW is less clear. But there is a base the company can and should leverage as it tries to once again make itself a player in the states.
Welcome back VW. We've been waiting for you.
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