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VW's new boss targets new buyers

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VW's new boss targets new buyers

'We intend to play in a bigger pond,' U.S. CEO says

David Phillips

Automotive News -- September 20, 2010 - 12:01 am ET

Volkswagen dealers will need to target a new kind of customer when the brand's U.S.-built mid-sized sedan debuts next spring, says Jonathan Browning, Volkswagen Group of America's new CEO.

VW expects more than 50 percent of the sedan's buyers to be conquest sales -- a goal that will require training in sales and customer relations, Browning said.

Dealers also will have to process and resell a new wave of trade-in vehicles, said the soft-spoken Englishman, a former General Motors and Ford Motor Co. executive who joined VW in June and will take over his new post Oct. 1.

"Our dealers need to adjust to the mind-set that we intend to play in a bigger pond," said Browning, who has spent his entire career in Europe and once led Ford's Jaguar brand. "The challenge for them is going to be dealing with growth."

VW has about 580 U.S. dealerships, including 260 stand-alones. Browning said head count won't change as volumes grow, although the automaker is looking at some open points across the country. He said about 80 percent of VW dealers are profitable.

Under Browning's predecessor, Stefan Jacoby, VW set out to more than triple U.S. sales to 800,000 annually by 2018 and to restore profits, quality and customer satisfaction levels along the way.

VW's 2010 U.S. sales are up 21 percent to 172,747 cars and light trucks through August. But with industry volumes forecast to recover slowly -- and given VW's years of red ink in the United States -- plenty of skeptics remain.

But Browning, who will be the fourth U.S. VW chief since 2005, is a believer. Since joining the automaker in June as head of global sales, he has seen tangible signs that VW is recommitted to the U.S. marketplace. They include products more tailored to the U.S. customer and the new $1 billion assembly plant in Chattanooga, Tenn., that will, in part, help insulate VW from exchange rates.

And Browning sees something else that remains untapped; the reverence and emotional attachment Americans once had with models such as the Beetle and Microbus.

"This is a dynamic, competitive marketplace," Browning, 51, told reporters during a brief stop last week in the Detroit area, where he visited VW's tech center and customer service center in Auburn Hills, Mich., and a nearby dealer. "If you offer the right product and the right value, you'll see progress in the marketplace."

BROWNING'S TO-DO LIST

• Prepare dealers for larger volume

• Launch products more suited to U.S. tastes

• Drive volume with 2011 Jetta, new mid-sized sedan and re-engineered Beetle

• Boost customer satisfaction

• Improve product quality

The key, Browning said, is engineering the right vehicles and making them accessible to more Americans. That probably will mean cost and price adjustments -- a process VW will optimize through new sourcing opportunities and content changes, Browning said.

For example, the new Tennessee-built four-door sedan that goes on sale next spring will be larger and priced as much as 25 percent lower than the current Passat to compete with the Toyota Camry, Honda Accord and Nissan Altima.

The starting price is expected to be about $20,000. The front-drive car will be larger than the CC and Passat sedans and will share 30 to 40 percent of its parts with the redesigned Jetta. VW expects to sell about 150,000 units annually.

In addition to the new sedan, the revamped 2011 Jetta and the next Beetle, which will form the core of VW's U.S. lineup, Browning also sees opportunities with the Golf and Tiguan.

"We will never abandon our German DNA," Browning said, "but we also need to make sure our products also work in their segment."

JONATHAN BROWNING

Age: 51

Nationality: English

Title: President and CEO, Volkswagen Group of America

Last job: Head of VW's national sales companies

Career highlights:

• Joined GM's Vauxhall Motors in United Kingdom in 1981, later ran GM Turkey

• From 1997 to 2001 was Ford Motor Co.'s head of European marketing and then managing director of Jaguar Cars Ltd.

• Returned to GM in 2001, working until 2008 as head of European sales, service and marketing and from 2006 until 2008 simultaneously as chairman of Vauxhall; in 2008, became GM's head of global sales, service and marketing; left GM in 2009

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100920/OEM02/309209980/1424#ixzz105ullWix

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