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Volkswagen plans $7 billion North American investment

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Volkswagen plans $7 billion North American investment

Europe’s largest automaker reiterated its goal of selling 1 million Volkswagen and upscale Audi vehicles annually in the United States by 2018 as it launches more locally made cars.

Volkswagen AG said on Sunday it plans to make a sport utility vehicle tailored for the North American market and will invest $7 billion in the region as it seeks to increase sales. The company said the move was a sign of renewed commitment to the market after a sales decline by its core VW brand, which continues to achieve low U.S. quality scores.

“The Volkswagen brand is and remains at the heart of our product strategy here,” CEO Martin Winterkorn told reporters in Detroit on the eve of the North American Auto Show.

The $7 billion is to be spent over five years as part of investment plans previously announced at a global level by the Wolfsburg, Germany-based group. VW said the new seven-seater SUV would be launched in 2016. Volkswagen’s Phaeton sedan, the brand’s luxury flagship, will also return to the U.S. market in 2016, he said.

Winterkorn declined to say whether the new vehicle would be assembled at VW’s Chattanooga, Tennessee plant or in Mexico, where production of the Golf compact begins next week.

In 2013, Volkswagen Group, which also owns the Porsche, Bugatti, Lamborghini, Skoda and Seat marques, sold 600,000 cars in North America. But the company last month ousted U.S. chief Jonathan Browning and replaced him with after-sales specialist Michael Horn after the VW brand’s sales fell 7 %.

Via Reuters

by Aurel Niculescu (my Google+) - Monday, January 13th, 2014 - filed under Industry, News, Volkswagen. Image credit: .
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