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VW exec: Tripling U.S. sales attainable

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VW exec: Tripling U.S. sales attainable

Christine Tierney / The Detroit News

Volkswagen AG's goal to triple VW sales by 2018 in a sluggish U.S. auto market seems challenging -- but doable, the new head of its U.S. operations said today.

"This is a dynamic competitive marketplace," Jonathan Browning, chief executive of Volkswagen Group of America, told reporters. "If you offer the right product, and the right value, you'll see progress in the marketplace."

He said Volkswagen had backed its goals with substantial investments to restore its presence in the U.S. market, after underperforming for many years.

It has redesigned its crucial compact and mid-size cars to meet the demands of U.S. customers while still remaining "true Volkswagens."

The German automaker also has expanded its North American manufacturing operations, building a $1 billion plant in Chattanooga, Tenn., to produce what it expects will be its best-sellers more affordably.

That combination of designing the right vehicles and making them accessible "is the key we're trying to unlock," Browning said during a visit to Michigan, where VW has technical operations. Its U.S. headquarters are in Herndon, Va.

The elements of Volkswagen's U.S. strategy were mostly in place when Browning was appointed this week as the replacement for Stefan Jacoby, who left VW recently to run Volvo Cars for China's Zhejiang Geely Holding Group Co.

The launch of the new Jetta, which is being built in Mexico, is under way, and the Tennessee plant is on track to start producing an as-yet-unnamed, all-new mid-size sedan next year.

Those two cars and the next-generation Beetle represent "the body of the volume we're looking to develop," Browning said at a briefing in Detroit.

Many analysts express doubts about Volkswagen's ambitious sales targets for the U.S. market, where it has struggled for years. The automaker has never recaptured its peak U.S. sales levels of just under 580,000 in 1970.

"Their sales expectations are so high," said Jeremy Anwyl, CEO of auto research firm Edmunds.com. "The challenge is going to be around the pricing."

Volkswagen is targeting a conquest rate of more than 50 percent for the mid-size car to achieve its goals. It's targeting U.S. sales of 800,000 VW-brand vehicles by 2018 -- compared with 213,454 units sold in 2009.

Its sales are up strongly this year. Through August, VW has sold 239,203 cars and light trucks.

Including sales of Audi-brand vehicles, the Volkswagen group is striving for annual U.S. sales of 1 million vehicles by 2018, as part of its goal to be the industry leader by then.

Browning said that objective was about much more than sales. VW is striving to be a leader in quality, consumer satisfaction and profitability, as well. "It's not simply a global market leadership objective."

From The Detroit News: http://detnews.com/article/20100916/AUTO01/9160358/1148/VW-exec--Tripling-U.S.-sales-attainable#ixzz0zhR1NL4F

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