Passat, Jetta, Beetle boost Volkswagen market share in U.S.

Passat, Jetta, Beetle boost Volkswagen market share in U.S.

November 27th, 2012 by Mike Pare in News

A new 2013 Passat sits in a bay at the Chattanooga Volkswagen plant.

Photo by Jake Daniels/Times Free Press.

Volkswagen market share

Photo by Laura McNutt/Times Free Press.

Volkswagen's share of the U.S. auto market has more than doubled from five years ago as it gains on its goal of selling 800,000 VWs annually by 2018.

With a lift from the Chattanooga-made Passat and the remodeled Jetta and Beetle, VW in September hiked its market share to 3.06 percent, according to the company.

That's up from just 1.44 percent five years ago and 2.08 percent in September 2010.

Frank Trivieri, executive vice president of sales for Volkswagen of America, said the automaker is experiencing big increases in many of its vehicle lines.

"We're seeing growth across our portfolio," he said.

Through October, VW sold 357,401 vehicles, up 35.6 percent from the same period in 2011, the company reported. The figures don't include sister brands such as Audi, which is hitting record U.S. sales marks.

VW's market share in the U.S. is even bigger if just passenger cars are counted. It has captured 5.1 percent of that market as of September, the company said. That's up from 4.3 percent a year ago.

By the end of 2012, the VW brand's total American sales could near its all-time record set in 1970, according to the automaker.

Analyst Aaron Bragman of IHS Automotive said that 40 years ago, VW's sales were basically on the strength of the Beetle. Today, VW is nearing record levels on the hoods of the Passat and other vehicles, he said.

"It has more mainstream products," Bragman said. "The vehicles have a lot more technology."

Jesse Toprak, vice president of industry trends and insights for TrueCar.com, said VW is a force pretty much around the world.

"The fact it is not here is a complete anomaly," he said.

European and Asian automakers have ramped up market share since 2007, sometimes at the expense of U.S. car companies. Hyundai, Nissan and Kia have seen big gains in American sales over the period, according to Autodata figures reported by the Detroit Free Press earlier this year.

VW's $1 billion Chattanooga plant, one of the city's largest employers with about 3,300 people, is expected this year to hit the 150,000-car production level for which the plant was originally constructed.

Frank Fischer, chief executive of VW's Chattanooga operations, said production could rise to 180,000 units next year, depending on sales.

The company is spending $7 million to bolster the number of vehicles it can assemble at the factory that officially started production in May 2011.

At the same time, top Volkswagen officials are studying whether to build a new sport utility vehicle in North America to compete head-on with the Ford Explorer, Honda Pilot and Toyota Highlander.

Fischer has said local officials are "trying to fight for a second model" to be made in Chattanooga. It's competing with other VW plants, including an existing facility in Puebla, Mexico, and a planned new factory by Audi in that nation.

Future Key

Toprak said a key for VW is expanding its U.S. lineup of vehicles.

"You don't want the customer not finding what they're looking for," he said.

Bragman said a midsize SUV could be positioned between the smaller VW Tiguan and bigger Touareg.

He predicted it could look similar to the new Nissan Pathfinder, and that Chattanooga has a good chance to land production of the SUV.

"One reason is Chattanooga has got the Passat platform," Bragman said.

Just last week, VW Group announced it plans to spend $65 billion over the next three years worldwide in new investments. VW aims to leapfrog General Motors and Toyota to capture the No. 1 mark in world sales by 2018.

Martin Winterkorn, VW Group's chief executive, said in a statement that the investment is the key to its innovation and technology leadership.

"Despite the challenging economic environment, we are investing more than ever before to reach our long-term goals," he said.

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