Browning departs as Volkswagen head in U.S.: New VW CEO faces lack of new product, analysts say

Browning departs as Volkswagen head in U.S.: New VW CEO faces lack of new product, analysts say

December 13th, 2013 by Mike Pare in Business Around the Region


* Age: 51

* Nationality: German

* Work: Joined Volkswagen in 1990 working on group and brand strategy; head of sales in northwestern Europe in 1997; named sales head for Europe in 2004; head of brand's global after sales since 2009.

Volkswagen Group of America's departing chief executive was hindered by an aging product cycle, and his replacement will face a similar challenge in growing sales, industry analysts said Thursday.

Jonathan Browning, who led VW's U.S. sales and marketing arm during the successful launch of the Chattanooga-made Passat, is leaving the post for personal reasons and returning to his native United Kingdom, according to the German automaker.

Michael Horn, a VW Group veteran who has headed the VW brand's global after sales since 2009, was named to the top job and is charged with re-starting the brand's sales growth, which has lagged other automakers in 2013.

Horn likely will benefit from the expected announcement soon that VW will make a seven-seat sport utility vehicle for the U.S. market, which could be assembled in Chattanooga. VW's only U.S. plant is seen as the front runner for the project. A decision to produce the SUV in Tennessee or Mexico could come by early next year, according to an official.

The Wall Street Journal reported Thursday the announcement could be made at the North American International Auto Show in Detroit in January.

Karl Brauer, senior analyst at Kelley Blue Book, termed Browning "a capable industry executive that experienced both the highs and lows of leading an automaker."

He said VW benefited from turbulent U.S. economic conditions that allowed the brand to grow as other automakers struggled. But the carmaker is caught in an aging product cycle just as buyers are coming back to showrooms, Brauer said.

"Browning's replacement will face the same challenges, but as new product enters the VW pipeline he'll be well positioned to potentially lead a VW recovery in the U.S," Brauer said.

Analyst Thomas Libby at IHS Automotive told The Associated Press that after effective launches of the redesigned Passat and Jetta models in the U.S., VW took a break in updating its offerings.

"There is general agreement that new product is a major factor in performance in the U.S. market, and VW has had a dearth, a pause, in product launches," he said.

Jonathan Browning, president and CEO of Volkswagen Group of America, addresses employees at the company's Chattanooga plant in this 2012 file photo.

Jonathan Browning, president and CEO of Volkswagen Group...

Photo by Doug Strickland /Times Free Press.

VW also lacks competitive products in some key U.S. market categories. Libby singled out the non-luxury crossover segment, where the company's Tiguan model was no longer competitive on price or value comparisons.

The German automaker's sales in November were 16.3 percent below year-ago levels, the company reported. Passat sales also were off in the month by 15.8 percent.

Overall VW sales through November were off 5.2 percent.

Browning said earlier this month in remarks to journalists and analysts that the company was bumping up against difficult comparisons after strong growth the last couple of years. For example, he said, VW's U.S. sales last month were 52 percent higher than November 2010.

"We're setting a new baseline in future investment," Browning said at the time.

Still, overall industry sales in November rose 9 percent with competitors such as General Motors up 14 percent, Nissan rising 10.7 percent and Toyota 10.1 percent higher.

Browning also was firm in the belief that there be "a formal vote" by Chattanooga workers on whether to permit the United Auto Workers to represent them.

The UAW has said it has a majority of signatures of the 1,600 or so hourly workers at the plant requesting the union to organize them. The union has said it wants VW to use "card check" and recognize the union and permit the setup of a German-style works council.

However, some top Tennessee political leaders such as Gov. Bill Haslam and U.S. Sen. Bob Corker, and the Chattanooga Area Chamber of Commerce, have called for a secret ballot vote.

Contact Mike Pare at or 423-757-6318.