Saturday, 26 May 2018

VW allows 'American-style name' for new crossover

CHATTANOOGA — Volkswagen AG executives broke from convention while debating the name of the midsize VW crossover launching in the U.S. next year: They let the North American team pick it.

Normally, a committee in Germany would have decided on a single global name starting with “T,” following the pattern of the Tiguan and Touareg crossovers before it, says Hinrich Woebcken, CEO of VW’s recently formed Volkswagen North America region. Instead, Woebcken says the new crossover, crucial to VW’s post-scandal recovery hopes, will have a “bullish, much easier to pronounce, American-style name” unique to the market.

He wouldn’t give away the name, but he strongly hinted it wouldn’t start with “T.”

Woebcken: “… Wolfsburg is willing to let go.”

To Woebcken, it’s a signal that headquarters is serious about giving its operation here more room to run amid VW’s broad effort to chart a recovery path in the U.S.

“Two or three years ago, it would’ve been a no-go that the region decides an individual name,” Woebcken said. “This is already an early sign that Wolfsburg is willing to let go.”

It’s not the first time VW executives have pledged to revive the U.S. operation with more resources and autonomy. Different this time, Woebcken says, are the tools available through the North American structure.

As head of the VW brand’s now-consolidated North American operations, Woebcken oversees purchasing, engineering, product development, manufacturing, sales and marketing. Never before have all those functions been under one unit and executive in North America.

A camouflaged version of VW’s new crossover undergoes testing. Photo credit: VW OF AMERICA

Woebcken said the cross-functionality of the new role and the chance to lead a “new start” for the VW brand attracted him to the North American post. 

“We want to grow. We want to get scale. This is not something you do short term,” he said. “This brand needs some years to really recover and step up then from there to a further profitable growth.” 

That will also require resolving unrest among VW’s dealers that has grown since the diesel scandal. Talks to address the scandal-related harm sustained by VW’s 652 U.S. dealers have been in the works since June. Woebcken said he hopes a “potential solution” can be reached within the next month or so, but declined to discuss specifics about a potential accord. 

Woebcken came to VW from brake supplier Knorr Bremse AG, where he was CEO of its commercial-vehicle division. Before that, he spent 10 years at BMW in purchasing roles before rising to division manager of driving dynamics, where he oversaw purchasing, production and development for ride and handling for all BMW Group model lines. He was also heavily involved in BMW’s plant in Spartanburg, S.C., he said.

An industrial engineer by training, Woebcken says he has a personal affinity for the U.S. after spending his senior year in high school as an exchange student in Rochester, N.Y. His family has moved to a home in suburban Washington from Germany. 

“We have a short- and midterm view, and as we speak we are working on a strategy for where the brand wants to be in 2025,” Woebcken told reporters last week at VW’s engineering and planning center here. “We are pretty much done.” 

He declined to discuss the plan in detail before its scheduled release this fall, but said VW would pivot near term to SUVs and all-wheel-drive offerings before an electric vehicle push to begin in 2020, which will include North American production of EVs, he said. 

In general, he said VW would field vehicles in large mainstream segments with prices and content to compete for volume with larger mainstream brands. At the same time, its lineup will be complemented by high-performance and more European-style vehicles where it can seek more premium pricing, Woebcken said. 

Near term, VW hopes to make a splash in key mainstream crossover segments with two models launching next year: the midsize crossover built at VW’s plant here and the long-wheelbase Tiguan compact cross-over, made in Mexico. 

Those models, along with the Golf Alltrack, a more rugged Golf wagon with awd arriving stateside this fall, will give VW a short-term boost to aid its recovery from the scandal. A redesigned Jetta compact sedan will then arrive in 2018, he said. 

“We will gain market share out of this,” Woebcken said. 

While he declined to discuss sales goals, Woebcken made clear that growth in the U.S. is essential for VW. Through June, its U.S. market share stood at 1.7 percent, down from 2 percent last year. 

“We want to build the brand story to a level that this brand is not seen as a niche player anymore,” Woebcken said. “It’s not a matter of surviving, it’s a matter of being relevant.”

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