Automotive News - January 28, 2008 - (Page 43) JANUARY 28, 2008 • 43 VW plans engine, transmission production in North America Rick Kranz rkranz@crain.com Stefan Jacoby Title: CEO Company: Volkswagen Group of America Main point: VW will do whatever it takes to sell 800,000 VW-branded vehicles in the U.S. by 2018. Quote: “If we don’t localize the plants (in North America), we can’t be competitive.” van will debut next month at the Chicago Auto Show. Although VW once sold a pickup in the United States, a pickup will not be needed to reach VW’s 800,000unit U.S. target. c JOE WILSSENS DETROIT — Volkswagen will have engine and transmission plants in North America to support a new vehicle assembly plant the automaker is expected to build in North Carolina. The assembly plant could be operational in 2010. “We’ll make an announcement within six months” about the plant location, Stefan Jacoby, CEO of Volkswagen Group of America Inc., told the Automotive News World Congress here last week. After that announcement, the first vehicles could appear in “a little bit more than three years,” he said. Jacoby said the engine and transmission plants do not have to be near the assembly plant, adding that Mexico and Canada are options. But “if we don’t localize the plants” in North America, he said, “we can’t be competitive.” Generally speaking, an engine and transmission account for about onethird of a vehicle’s cost. Jacoby refused to confirm an Automotive News story that the automaker may be buying land near Rocky Mount, N.C., east of Raleigh and Durham. Said Jacoby: “There has been a lot of speculation on this front, including the silly rumor that I’ve been traveling the Carolina countryside with a bunch of Germans purchasing land. That is not true. “We need to build the right vehicle, at the right price, in the right plant, within the right supplier corridor, at the right time. A decision on local production will come in six months.” The assembly strategy is part of the automaker’s plan to sell 800,000 VW brand vehicles annually in the United States by 2018. VW refers to its Five Pillars plan to reach that target. The five pillars refer to: 1. Redesigned vehicles and a wider product line for the United States. 2. A new advertising campaign to reposition the brand. 3. An improved dealer network. 4. A streamlined VW organization. 5. Evaluation of U.S. production. In other comments, Jacoby said: “We need to offer a portfolio of technology” to meet U.S. fuel economy regulations. “It will include hybrids, electric vehicles. The main pillar will be diesel. It will be lighter vehicles and, of course, this country has to get used to smaller vehicles. They could be an alternative.” It was a mistake to end Phaeton sales in the United States. “We are thinking of relaunching the Phaeton, which is difficult in this market. I think Volkswagen is so good at brands that we can offer models in the volume segment and also in the luxury segment. It is a state-of-theart car, and I think this car will fit very well in this market.” The VW brand has a sufficient number of U.S. dealers to handle sales of 350,000 to 400,000 vehicles. When the brand reaches that total, more dealers will be added. Last year, VW sold 230,572 vehicles. In the meantime, Jacoby said, VW is concentrating on improving and strengthening the quality of its dealer network. The Chrysler-engineered VW mini- VW’s Stefan Jacoby: “We need to build the right vehicle, at the right price, in the right plant, within the right supplier corridor, at the right time.” http://www.regonline.com/08newsmaker
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