Volkswagen unveiled a new Passat last week in Paris, but the U.S. will not see that car. Instead, we're getting a unique product that's only known as NMS and VW has plans to bring the NMS to China next year.
It's no secret China is the hottest new car market today. Not only have sales in China surpassed the U.S., there's the potential for a market as large as 19.2 million sales inside of eight years. Chinese buyers favor bigger vehicles with spacious rear seats and frequently purchase long-wheelbase versions of smaller cars, like the Audi A4L, because there are so many chauffeurs. The NMS should be slightly larger than the European Passat sedan in order to please American consumers.
In order for VW to surpass Toyota in profitability and overall sales, China has become the automaker's top priority. Two new factories have been announced for China recently and they would potentially double VW's production capacity in the country to 3 million vehicles per year by 2014. VW announced the factories as part of an $8.3 billion investment in China.
The plant in Chattanooga, Tennessee, where the NMS will be produced to start, is part of VW's plan for the U.S. division to become profitable once again. Volkswagen's U.S. profitability has been hampered by a strong Euro in the past because key vehicles in cost-sensitive segments were built using expensive European labor. Now VW is building more flexible plants that can build a variety of models without expensive retooling procedures. Ulrich Hackenberg, head of Volkswagen's brand development, told Automotive News: "Our production pattern allows us to transfer vehicles from one plant to another at relatively low effort."
If all goes according to plan, VW will sell 67,000 units of the NMS in the U.S. next year while ramping up to an annual volume of 150,000 units by 2012. The NMW is expected to be unveiled at the Detroit auto show in January and there's a strong possibility it will be called Passat. Up to its unveiling earlier this year, the new Jetta was simply called NCS for new compact sedan.
How will Volkswagen move so many units? Don't rule out a NASCAR campaign to generate more awareness of the new model.
Source: Automotive News (Subscription required)