Motor City Blogman

With Atlas Finally Arriving, VW Goes Big on SUVs

Subcompact Sport/Utility is in the cards

LOS ANGELES – The 2018 Volkswagen Atlas arrives early next year, followed by a redesigned compact Tiguan sport/utility, so it follows that a b-segment, subcompact crossover isn’t far off for the brand. Volkswagen of America is looking into entering the segment just invaded at the auto show here by the launch of new Toyota CH-R, and led by the Honda HR-V, Chevrolet Trax and Mazda CX-3.

“We are looking at [a subcompact] SUV very seriously,” Matthias Erb, chief of Volkswagen’s North American Planning & Engineering Center, told a roundtable of auto journalists. VW needs to get in such segments in order to become a full-line brand in the U.S., according to Hinrich Woebcken, who was appointed VW brand’s North American CEO earlier this year after a long career at BMW.

“The big splash is going to be the product momentum,” Woebcken told us. “Volkswagen has been received in the market as very much a small car company. So we only had a reach with the segments in the market up to now of only 40 percent. And we’ve developed the plan to go forward to reach closer to 70 percent, entering segments with a stronger momentum than we did before. The symbol for this is the Atlas, the biggest architecture that Volkswagen has ever built for this market.”

Yes, of course, the prospect of selling a pickup truck like the Anorak came up. VW is considering such a truck for the U.S., Woebcken said, though it wouldn’t be before the next generation of the Anorak. Without confirming much of anything, Woebcken and Erb hinted that a “midsize” pickup like the Chevy Colorado, Toyota Tacoma and Honda Ridgeline would be more likely than a full-size Ford F-150 competitor. The Chicken Tax would make VW pickup assembly outside NAFTA or a couple of other exempt countries prohibitive, so assembly in Tennessee or in Mexico would be virtually required – and those plants make only unibody models.

While Woebken refused to close the door on importing TDI diesel models to North America again in the interview roundtable, conducted during auto show press days, his boss in Germany overruled him this week. VW stopped diesel sales immediately in September 2015, with none sold in 2016 and none imported for the 2017 model year.

“Volkswagen had 25-percent [diesel] market share in the U.S.,” Woebcken said. “These numbers will not come back. [Model Year] 2018 or later is something we have to look at, model-by-model.”

On Tuesday, VW brand CEO Herbert Diess said that it would not offer the 2.0-liter diesel in the U.S. This seems a smart move for Volkswagen if it wants to go beyond relying on its fairly small contingent of loyal customers in the U.S., and challenge far more successful Asian brands here. Beside kneecapping Woebcken’s dreams of independence for VW of America, Diess’ statement leaves mainstream diesel car/SUV sales to newcomers Chevrolet and Mazda, the latter of which announced at the L.A. Show it will add a diesel option to its CX-5 compact crossover next year.

VW of America’s newfound independence, a change Woebcken no doubt demanded before he took the job last April, mostly affects car allocation to dealerships, and other inside baseball issues. But Woebcken and Erb made it clear VW plans an aggressive product plan that won’t be held back by Wolfsburg’s often misplaced assumptions about the North American market.

And VW plans to be more aggressive about updating models, with minor or major facelifts of the Atlas and others coming after two years. Not long after the Tennessee-built VW Passat launched for the 2012 model year, the car’s sales eventually breached the 10,000-per-month level. But within two years after the launch, those sales numbers struggled to reach 7,000 per month.

“The [Passat] facelift, which was launched last year was launched in the middle of the diesel crisis,” Woebcken said. “So, unfortunately, it was launched in an unhappy period for Volkswagen. The recognition of the great work done on the facelift was diminished by the diesel crisis.”

VW also plans more than 30 electrified models, globally, by 2025, and will import a yet-undetermined number of them to the U.S. While VW is working hard on its revival, and plans to push sales, finally, into the big leagues, it has given up talk of reaching 800,000 units in the U.S. any time soon, let alone by 2018, its pre-Dieselgate goal early this decade.

Volkswagen sales in the U.S. is down “only” 16 percent so far this year, Woebcken said — last year it struggled to reach the halfway point of its old goal, falling under 400,000 sales. He’s confident that well-designed and engineered new product filling that 30 percent VW doesn’t yet cover, whether offered with diesel power or not, will redeem the brand in this country.

“The great thing about the United States,” he said, “you guys give people who are in the dust and stand up with a plan, you give those a second chance. You love those comeback stories.”

Buying Guide
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2018 Volkswagen Atlas

2018 Volkswagen Atlas

MSRP $35,550 V6 Launch Edition 4MOTION

EPA MPG:

22 City / 26 Hwy

Cargo (Std/Max):

21 / 97 cu. ft.

Seating:

7/7