Volkswagen will push for more new products from its Chattanooga plant as it keeps "a volume strategy" for U.S. sales, the head of the VW dealer council in America said Friday after meetings in Germany.
"VW plans to come back strong," said Alan Brown, a partner in a Texas dealership, who was among a dozen dealers just returning to the U.S. after meeting top Volkswagen officials at the automaker's headquarters in Wolfsburg.
In the wake of the diesel-emission scandal that has hurt sales, VW officials are looking at selling at least 500,000 VW-brand vehicles a year baseline and beyond, he said. VW sold just under 350,000 cars and SUVs last year.
Brown said that after the Chattanooga-made midsize SUV hits dealer showrooms near the second quarter of 2017, VW plans to continue to push more product out of the Tennessee plant.
Talks arose last year about the potential assembly of a second SUV in Chattanooga. In the past few weeks, German news outlets indicated VW may be looking at electric vehicle production in the Chattanooga plant, which already employs about 2,500 workers.
Also, Brown said prices for the Chattanooga-made Passat need to come down to better compete with vehicles such as the Toyota Camry.
"They're working quickly on a price strategy," he said.
Brown said VW "can never make a profit" in the U.S. without volume sales and the dealer network won't be able to recoup its investments. He said last week that he and the other dealers made the trip to Germany to "make sure everyone is on the same page" when it comes to future sales.
Herbert Diess, global chief of Volkswagen AG's namesake brand, sounded out U.S. dealers at the Detroit auto show in January over whether VW should stop trying to compete with volume producers such as Honda to focus on higher-end models.
Brown said the dealers met with Diess and other top officials, who indicated the U.S. market has their full attention.
He said Diess has committed to attending the National Automobile Dealers Association meeting April 2 in Las Vegas where the VW official plans to make several announcements.
"They must be successful in the U.S. market to achieve their goals," Brown said.
Mike Randle, publisher of Southern Business & Development magazine, said the diesel scandal has caused VW sales to struggle and it may take a while to overcome its problems."There's a trust they'll have to reinstate among buyers," he said.
Randle said he's not sure if VW understands the American car business culture as do officials at Toyota, Nissan and even other German automakers such as Mercedes and BMW.
However, VW is spending $600 million in Chattanooga as part of a $900 million project to produce the midsize SUV.
Volkswagen has admitted that 11 million of its diesel-engine vehicles, including more than 500,000 in the U.S., were equipped with software that was used to cheat on emissions tests.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.