Volkswagen sets out to double U.S. sales

A worker checking a Volkswagen Golf model on a production line.

Jeff Horwich: Here in the U.S. the economic recovery still looks kind of touch-and-go. But at least one foreign company is doubling down on the United States. Volkswagen wants to sell 800,000 cars and trucks a year in the U.S. by 2018. That's an ambitious goal: it's more than twice what German automaker sells here today.

Jonathan Browning is the president of Volkswagen of America. Glad to have you with us.

Jonathan Browning: It's a pleasure.

Horwich: First of all, tell me how you plan to make the kinds of cars that Americans are going to want to buy. You're going to have to sell a lot more to them. So, what is it -- about the Passat, for example -- that you think is going to be a success. What else do you have up your sleeve?

Browning: Well, one of the things that we've been doing is very specifically making the vehicles very affordable for U.S. customers. And so this is a brand that delivers German engineering but at affordable, accessible prices. For example, with the Jetta, we reduced the entry price of the latest generation Jetta to approximately $16,000; and with the Passat, we've also made that more affordable to more customers. So really taking the VW brand from covering a small segment of the marketplace to a much broader segment.

Horwich: VW has kind of a shaky reputation traditionally for... reliability? I imagine you're working on that as well.

Browning: You know, the German engineering really drives a lot of integrity into our vehicles. But the German engineering focus has also perhaps not always been sensitive to some of the priorities of our U.S. customers. So, for example, something like cruise control isn't used too frequently in Europe, but in the U.S., is much higher frequency use.

In surveys like JD Power those things get marked down against VW, and so what we're doing is making sure our vehicles are now designed first and foremost with the U.S. customer requirements in mind.

Horwich: And where are you going to make all these new cars that we're supposedly going to buy?

Browning: Well, a significant proportion will be sourced within the North American region, and specifically in the U.S. We've just opened a new facility in Chattanooga that really is a state-of-the-art plant. We established a hiring target of 2,500 people as a first phase of our investment, and then earlier this year we're actually very pleased to be able to announce that we're adding 1,000 jobs on top of the 2,500 target during the course of this year -- so tremendous growth in terms of our U.S. manufacturing capacity.

Horwich: Mr. Browning, thanks very much. It's good to talk with you.

Browning: Thank you very much Jeff.

Horwich: Jonathan Browning is the president and CEO of Volkswagen of America. Those plans for U.S. growth are part of a bigger plan to challenge Toyota and GM as the biggest automaker in the world.

About the author

Jeff Horwich is the interim host of Marketplace Morning Report and a sometime-Marketplace reporter.

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