VW plant stops production of diesel Passats while awaiting emissions fix

VW plant stops production of diesel Passats while awaiting emissions fix

November 11th, 2015 by Mike Pare in Business Around the Region

Volkswagen has ceased production of diesel-powered 2016 Passat sedans at its Chattanooga plant while it awaits a fix to the vehicles hit by the emission-rigging scandal.

The pause comes amid a planned production ramp-up for the refreshed Passat, the company said Tuesday.

Greenpeace activists stand with 'CO2' formed with the VW logo and a banner that reads 'the problem' above the Volkswagen factory gate in Wolfsburg, Germany, Monday, Nov. 9, 2015. (Peter Steffen/dpa via AP)

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Photo by The Associated Press/Times Free Press.

"We are not building Passats with TDI engines at this time, but as we are in the middle of the ramp-up of the production volume, it is no problem to adjust the mix to accommodate this change," company spokesman Scott Wilson said.

After the EPA announced in September that diesel vehicles contained illegal software that masked their emissions, the company said it was continuing to build Passats but not selling them as it awaited a fix for the vehicles. A fix still hasn't been announced.

Wilson said in an email that there are no other changes on the plant's floor, and he said the $600 million expansion of the factory to build a midsize SUV is continuing.

VW's Passat diesels represented about 29 percent of the sedan's U.S. sales before the Sept. 18 EPA order that suspended diesel sales, according to Kelley Blue Book.

Jack R. Nered, the executive editorial director and market analyst for KBB.com, said he expected the plant would switch production to the gasoline-powered Passat.

VW has refreshed the Passat as it tries to ramp up sales in one of the most competitive segments in the U.S. market. Sales are slated to start by the end of the year.

"VW would like to have higher market share," Nerad said. "That's one of the reasons they did the refresh."

But Nerad said the unveiling of the new Passat came out at about the time news broke about the emissions cheating.

"They've got a lot riding on doing better [in Passat sales] than in the past," he said.

Passat sales in October jumped a surprisingly strong 24.6 percent from a year ago. Sales were 8,116 vehicles, or 1,603 more than a year ago, according to the company.

Pricing for the new Passat starts at $22,440, which is the same as the outgoing base model when equipped with an automatic transmission.

When new content is factored in, the price for the 2016 model represents a $1,315 value enhancement over the base 2015 Passat.

Late last month, the company reaffirmed its expansion plans in Chattanooga.

"We know we have a lot of hard work ahead of us, but this is a crucial moment in our efforts to deepen our commitment to America," said Christian Koch, chief executive for VW in Chattanooga.

Contact staff writer Mike Pare at mpare@timesfreepress.com or 423-757-6318.


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