VW remains committed to US program for new SUV image

The German automaker will retain its $900 million investment plan to deliver on the US market an all-new sport utility vehicle to be manufactured at its sole manufacturing facility in the country.

The project seemed in jeopardy because of the massive cost cuts the VW namesake brand will need to harness in the coming years as it strives to cover the expenses stemming from the group’s biggest business crisis in its 78-year history. VW AG admitted last month it had cheated on diesel emissions tests in the US and a full 11 million vehicles sold around the world since 2009 had been equipped with illegal software. “The American market is and will remain a strategically important market for Volkswagen,” commented a company spokesperson. Last year Europe’s biggest automaker, also the second largest in the world, decided to invest $900 million, including $600 million at its factory in Chattanooga, Tennessee, to design and manufacture an all new seven-seat SUV starting 2016 as part of a strategy to expand its presence in the second largest global auto market. The company has recovered lost ground in Europe due to the financial crisis and also expanded fast in China but has so far been unsuccessful at becoming more than a niche player in North America.

Now reports are also putting its US plans into question after the monstrous diesel emissions scandal erupted last month. The company, which aims to have its namesake division bear the brunt of the costs, has announced recently it would aim for cost cuts of another one billion euros on top of the previous plan to help the group endure the financial toll from recalling the cars and settling lawsuits and regulatory penalties.

Via Bloomberg