Volkswagen Atlas-based pickup truck among options weighed by German automaker

Volkswagen Atlas-based pickup truck among options weighed by German automaker

January 15th, 2017 by Mike Pare in Business Around the Region

Staff File Photo by Angela Lewis Foster A Volkswagen Atlas was on display during the Spirit of Innovation Awards luncheon and expo in November at the Chattanooga Convention Center.

Photo by Angela Lewis /Times Free Press.

“Its like Lego blocks. Youve got an engine and wheels. Its adding and subtracting Lego blocks. Youre just moving them around.”
Auto analyst Michael Harley on how the Atlas production platform could be used to assemble a potential pickup truck.

Staff file photo by Doug Strickland / Job-seekers look at the new Volkswagen Atlas SUV during a recent job fair with Volkswagen staffing contractor Aerotek held at the Volkswagen manufacturing last month.

Staff file photo by Doug Strickland / Job-seekers...

Photo by Doug Strickland /Times Free Press.

Pickup truck sales

Total pickup truck sales in the U.S. in 2016 and December transaction prices:

› Full-size: 2.24 million $46,985

› Mid-size:

448,398 $32,658

Source: Kelley Blue Book

Volkswagen is looking at its options for possibly filling the pickup truck segment in America, including potentially retooling the new Atlas sport utility vehicle, an official says.

"This is one option," said Dr. Matthias Erb, head of product strategy for VW in the United States and who oversees the German automaker's engineering and planning center in Chattanooga.

Other options include selling VW's Amarok pickup, which isn't sold now in America, or not offering a truck for the U.S. at all, he said.

"It's a very American segment," Erb said.

Erb said VW has bolstered its SUV lineup in the U.S. with its Chattanooga-made Atlas, set to hit dealerships this spring, and a bigger Tiguan, also slated to arrive on lots later this year.

Breaking into the American pickup market by refashioning the mid-size Atlas chassis into a truck would follow what Honda has done by using its Pilot SUV as a platform for its Ridgeline.

Honda assembles both the mid-size Pilot and Ridgeline truck at its Lincoln, Ala., production plant just a couple of hours southwest of Chattanooga.

Michael Harley, a Kelley Blue Book analyst, said Honda is selling a lot of Pilots.

"If it's making another 15 percent and selling it as the Ridgeline, there's a nice buffer," he said. "If it sells another 10,000 to 15,000 a year, there's something there."

In the $900 million expansion of the Chattanooga plant to ready it for Atlas production, Harley said VW installed its flexible MQB production platform which enables the company to make a variety of vehicles on the same line.

"It's like Lego blocks," Harley said. "You've got an engine and wheels. It's adding and subtracting Lego blocks. You're just moving them around."

VW already produces a mid-size truck, called the Amarok, for use in South America, Europe and Australia. However, the vehicle isn't certified by U.S. regulators for use in the American market.

"It has experience [assembling a pickup] with the Amarok," Harley said.

But don't expect to see any movement on a potential VW pickup for the American market for at least the next year, said Harley.

Harley said VW, if it decided to launch such a pickup, could do it within three years. He said that's relatively quick in the auto industry.

"If there's customer demand, customer pull, Volkswagen could turn it around quickly," he said.

Erb also said it's too early to determine what decision will be made, or even where such a potential pickup would be built.

"You have to decide if it's the right thing and the right time," he said.

But, Erb said, pickups are "a profit pool. It's an attractive segment."

Another factor to consider is that a Ridgeline has a "uni-body" construction, with a more passenger car-like feel, while the Amarok is a more truck-based body-on-frame vehicle.

In the wake of lower fuel prices, pickup truck and SUV sales have surged, according to Kelley Blue Book. More than 2.2 million full-size trucks were sold last year, up nearly 8.7 percent over 2014. The number of mid-size trucks sold in 2016, 448,398, is about 76 percent higher over 2014.

Atlas production started in December. The Chattanooga plant is bringing on about 1,100 more employees for Atlas assembly alongside the Passat sedan, pushing the factory's headcount to about 3,400 workers.

For Volkswagen, it wouldn't be the first time it built a pickup in the U.S., if it goes that direction. In 1980, VW introduced the Rabbit pickup, a small truck assembled for several years at VW's Pennsylvania plant before that facility shut down in 1988.

At the Detroit show, the redesigned Ridgeline was named top truck in North America by a vote of auto journalists. Honda sold 23,667 Ridgelines in 2016, according to the company.

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