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    William Maley

    Volkswagen's North America CEO Tries to Figure Out the U.S.

      Volkswagen tries to figure out the U.S., take umm.. What take are we on?

    For a number of years, people have been saying the biggest problem with Volkswagen is they haven't “figured out the American market yet.” Even the automaker admits that it's the reason that its market share has dropped. Volkswagen has tried again and again to make some inroads into the market to no avail. But the German automaker is giving it another go.

    Automotive News had the chance to do a deep dive into Volkswagen's new plan by speaking with Volkswagen Group of America CEO Hinrich Woebcken. His plan involves turning this division into an American car company - in spirit. It should be noted that Woebcken came to the U.S. as an exchange student in the seventies, something he credits for getting him interested in industrial engineering.

    "I owe America, I owe Rochester, N.Y., and I owe this metal shop for how I basically went to start my adult life. We want to get more Americanized not only in our product but in our business. It's not that we're giving up on the genes of the Volkswagen brand. Volkswagens are Volkswagens. But what we recognized over the years is ... that we were too much a small-car company, too much a sedan company," said Woebcken.

    This plan was sparked only a couple months into his position as Volkswagen America's CEO. During a meeting with dealers, Woebcken was introducing the three-row crossover that is now known as the Atlas. But at the time of the meeting, it was wearing the Teramont name. Dealers hated the name and wanted to have Atlas as the name. Woebcken agreed to talk with his bosses about changing the name.

    "Everybody said there was no chance to convince headquarters to change the name of a regional product. It's not a big thing, I know, but it's a symbolic statement that Wolfsburg said, 'OK, the region is independent. They want to make sure the brand is getting successful in this country. Let them decide for themselves the name,' " explained Woebcken.

    "It was, in terms of Volkswagen, a pretty big thing that demonstrates ... that this is really an independent company here in America, that the factories report to us, the engineering centers in California and Detroit report to us, the purchasing organization — which is a big leverage for the cost situation — is reporting into the North American region, plus, of course, all the sales and marketing. So we really have all the levers in our hand now, not only to listen to the demands of the market, but really also to implement them."

    Some of the parts of Woebcken's plan have come to fruition including cutting the prices on various models like the Tiguan and introducing a new 6 Year/72,000 Mile warranty.

    Other parts of Woebcken's plan include,

    • Shortening Volkswagen's long product cycles with plans to “introduce two new cars every year” to North America
    • Localize part sourcing for their two North American plans in Chattanooga, TN and Puebla, Mexico
    • Roll out Volkswagen's electrification strategy beginning in 2020 with the I.D. Crozz

    It is an ambitious plan but it seems to be paying off somewhat. Sales in 2017 rose 5.2 percent. In 2018, sales are up 5.8 percent.

    We highly recommend checking out this piece by Automotive News as we are only scratching the surface.

    Source: Automotive News (Subscription Required)



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    WOW :o Who would have thunk that if you build an auto that Americans want with names they like that sales would increase. for the last 40 years you could tell that a small car company attitude for Europe and Asian is not what works in America. :lol:

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    I'm more qualified than anyone here to assess VW's problems here. Their US operations are an absolute sh1tsh0w. 

    It's impossible to get Atlas SEL Premiums or R Lines. Ditto for the Tiguan. They crap on the Golf line more and more each year, rather than improving it. They are cheaping out on the new Jetta. They still have 2018 Golf R's sitting at port. They aren't bringing the new Touareg here, they refuse to bring other vehicles from foreign markets here, they overbuild Passats and Tiguan Limiteds in staggering amounts, etc, etc. I could go on, but you get my point. 

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      View full article
    • By William Maley
      On Wednesday, Honda CEO Takahiro Hachigo announced plans for the future of the company's automobile division. Efficiency was the theme in Hachigo's speech in terms of their lineup. manufacturing, and driving.
      One of the initiatives put forth by Hachigo was to cut down on the number of variations on offer in their global lineup, along with the dropping of various regional nameplates.
      "However, as a result of accommodating regional needs somewhat excessively in each individual region, we recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined. So, we will undertake initiatives to further strengthen our inter-regional coordination and collaboration and advance our art of making automobiles in order to simultaneously increase the attractiveness and efficiency of both global and regional models," he said.
      "With this initiative, by 2025, we will reduce the total number of variations at the trim and option level for our global models to one-third of what we have now.In addition, we will increase efficiency by eliminating and consolidating some similar regional models into even more competent models shared across multiple regions."
      This will allow Honda to simplify model allocation at their various assembly plants around the road. According to Hachigo, this will allow the company to achieve "100 percent capacity utilization worldwide by 2020" and cut production costs by 10 percent by 2025. 
      Part of that initiative involves a new modular architecture that will debut in a global model next year. No details on the vehicle were provided, but Honda says the goal of the architecture "is to commonize about 70 percent of the components" used in a vehicle such as the engine bay and passenger cabin.
      Honda is also planning to have two-thirds of their global lineup electrified by 2030. Furthermore, it wants 100 percent of its European lineup to be electrifed by 2025. To do this, Honda is readying a new electric city car known as the e, along with deploying their two-motor i-MMD hybrid setup to all of their models in Europe. In the U.S. Honda is planning to launch more hybrid models, and increase their electric car lineup with some help from General Motors.
      “In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market,” said Hachigo.

      Press Release is on Page 2
      Summary of Honda CEO Speech on Automobile Business Direction
      Remarks by Takahiro Hachigo, President & CEO, Honda Motor Co., Ltd. May 8, 2019
      Honda has been working on two top-priority management challenges in the midst of abrupt changes in the global business environment surrounding the automobile industry: to strengthen the structure of our automobile business and to further increase the speed of business transformation for future generations.
      So, today, I would like to introduce some initiatives we are taking for our automobile business, especially how we are strengthening the structure of our automobile business, the direction we are taking with electrification, as well as some progress we have made to date.
      Strengthening automobile business structure 
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      As a result, we currently have the five global models, namely Civic, Accord, CR-V, Fit/Jazz and Vezel/HR-V, and these five strong models now account for 60% of our global automobile sales. At the same time, our regional models such as the N Series for Japan, Pilot for North America and Crider for China are playing an important role as a source of growth for each respective region.
      However, as a result of accommodating regional needs somewhat excessively in each individual region, we recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined. So, we will undertake initiatives to further strengthen our inter-regional coordination and collaboration and advance our art of making automobiles in order to simultaneously increase the attractiveness and efficiency of both global and regional models.
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      Moreover, we have already introduced the Honda Architecture in our development.
      The Honda Architecture is a company-wide initiative which will increase the efficiency of development and expand parts-sharing for our mass-production models. The first model being developed with this new method will be the global model we are launching next year. And we will continue increasing the number of models to which we apply this new architecture.
      With the strengthening of global and regional models through inter-regional coordination and collaboration and with the introduction of the Honda Architecture, by 2025, we will reduce the number of manhours we use for the development of mass-production models by 30%, and we will repurpose those manhours to accelerate our research and development in advanced areas for the future. In this way, we can continue creating new technologies which will support the future of Honda.
      Strengthening our operational structure in the area of production 
      In addition to the area of development, we are further strengthening our operational structure in the area of production as well, so that we can create strong products with high efficiency.
      We are making steady progress in optimizing our production capacity in all regions. When this is complete, we are expecting to see that our global capacity utilization rate, excluding China, will increase from 90% recorded in 2018, and we will be producing at full capacity by 2022.
      In China, the third plant of Dongfeng Honda became newly operational, and this put us in a position where we can definitely accommodate market demand in China. We believe that this progress we made paved the way for the optimization of our global production capacity.
      From here onward, we think it is important to increase our competitiveness by increasing the efficiency of our production system in North America.
      For our business in North America, while keeping pace with sales expansion, we enhanced our model lineup and established a flexible production system where our plants sometimes produce various models in duplication to accommodate changes in market demand. However, as a result of the pursuit of high flexibility, an increase in the investment amount and a decline in production efficiency started to become an issue. Therefore, in North America as well, we will reduce the number of variations at the trim and option level, and at the same time, we will simplify the production model allocation at each plant. Through this initiative, we will re-establish a highly-efficient production system and realize the growth of North American business through the pursuit of quality.
      By implementing these initiatives to increase production efficiency in each region, we are expecting to reduce global cost in the area of production by 10% by 2025, compared to the cost recorded in 2018.
      Through all these initiatives I have mentioned, we will steadily strengthen the structure of our automobile business and realize the solidification of our existing automobile businesses by 2025, and, at the same time, we will accelerate our preparation for the future.
      Direction for the electrification of our automobile products
      Striving to realize a carbon-free society, Honda set a goal to electrify two-thirds of our global automobile unit sales by 2030.
      When we talk about the introduction of electrified vehicles, there are two perspectives. One is the improvement of fuel economy, and the other is zero emissions. Regulations for the Corporate Average Fuel Economy (CAFE) standards are becoming increasingly stringent in every country around the world and complying with CAFE standards is one of the most important challenges for the automobile industry. At Honda, in light of the required infrastructure and how people use automobiles, we believe that hybrid technology is, at this moment, the most effective way for us to comply with CAFE standards. Therefore, we will electrify our products mainly with hybrid technologies. By increasing sales of our hybrid models all around the world, Honda will contribute to the global environment through the improvement of fuel economy.
      To this end, we will expand the application of our 2-motor hybrid system to the entire lineup of Honda vehicles. In addition to the 2-motor hybrid system which is compatible with mid-to-large-sized vehicles, we developed a new, more compact 2-motor hybrid system suitable for small-sized vehicles. This small-sized 2-motor hybrid system will be adopted first by the all-new Fit which we are planning to exhibit as a world premiere at the Tokyo Motor Show this fall.
      In addition to the expansion of the lineup of products equipped with the 2-motor hybrid system, we also will expand the application of the 2-motor hybrid system on a global basis. With that, by 2022, we are expecting to reduce the cost of the 2-motor hybrid system by 25% compared to the cost of this system in 2018.
      As for zero emission vehicles, with our battery EVs we will comply with the Zero Emission Vehicle (ZEV) program being adopted by California and other states in the U.S. and China's New Energy Vehicle (NEV) mandate. We will efficiently introduce our battery EVs to the market by selecting the most appropriate partners and resources to satisfy the different needs in each region.
      In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market.   
      In China, in order to keep up with the fast speed of electrification, we have already begun introducing battery EV models developed together with our local joint venture companies in China. While envisioning the introduction of battery EV models from the Honda brand, we will continue utilizing local resources in China and introduce more battery EV models in a timely manner to fulfill local market needs in China.
      In Europe and Japan, we will introduce the Honda e, a new battery EV model, which was recently introduced as a prototype at the Geneva Motor Show.
      To summarize, Honda will popularize and improve the business feasibility of electrified vehicles by focusing on hybrid vehicles and battery EVs.
      Changes in operational structure
      In order to ensure the solid implementation of these initiatives I just introduced for our automobile business, we renewed our operational structure as of April. The aims of this structural change are to establish an organization which brings all regional operations together to strongly facilitate inter-regional coordination and collaboration and to increase the speed of our business operations by enabling prompt decisions and prompt execution.
      Today, I introduced our initiatives to strengthen our automobile business structure and the direction of our electrification. Under the new organizational structure, we will realize our goals with a keen sense of speed. 
      Closing
      As we stated in our 2030 Vision, Honda is striving to grow through the pursuit of quality so that we can fulfill our vision to "Serve people worldwide with the joy of expanding their life's potential."
      Honda will continue taking on new challenges while being driven by strong passion, so that we can continue to be a company that society wants to exist even in 2050 after Honda becomes more than 100 years old. 
      *1 S-E-D-B: Sales, Engineering (Manufacturing), Development (R&D), Buying (Purchasing)
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      Volkswagen expect production to start in late 2019 with initial deliveries happening in mid-2020. No word yet on when the model will hit US shores.


       
       

      View full article
    • By Drew Dowdell
      Drivers in Europe can now place deposits for Volkswagen's new ID.3 all electric vehicle.  This is the car that Volkswagen expects to compete with the Tesla Model 3 in the compact EV space. The target starting price for the ID.3 is under €30,000 which translates to $33,585 at the time of this writing. Initial vehicles offered will be special edition ID.3 1st. With an initial run of 30,000 vehicles, the ID.3 1st starts around €40,000 ($44.803) and comes equipped with voice control, navigation system, larger wheels.  There is also an ID.3 1st Plus that ads IQ Light and bi-color design while a Max adds a panoramic glass roof and an advanced heads-up display. 
      The 3 in the name ID.3 marks the vehicle's importance to Volkswagen's history as the most important vehicle after the Beetle and Golf, and also signifies the ability for VW to expand the ID brand in either direction.
      The entry level ID.3 can travel up to 205 miles on a single charge while mid-grade can go 261 miles and top-line models get as far as 342 miles. 
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      As the next generation of Golf hasn't actually been released yet, Volkswagen is declining to comment. 

      View full article
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