VW official: Chattanooga plant plenty of capacity; Atlas five-seat offshoot 'highly likely'

VW official: Chattanooga plant plenty of capacity; Atlas five-seat offshoot 'highly likely'

September 1st, 2017 by Mike Pare in Business Around the Region

A Volkswagen employee wipes down the sides of cars as they pass her on the assembly line at the Volkswagen Assembly Plant in Chattanooga.

Photo by Erin O. Smith /Times Free Press.

“Dealers are asking to deliver more.”
Hinrich Woebcken, CEO of Volkswagen Group of America, about the Atlas SUV

The head of the global Volkswagen brand said here Thursday it's "highly likely" the German automaker will bring a five-seat derivative of the Chattanooga-built Atlas SUV to the market.

Also, Dr. Herbert Diess said he expects the electric-vehicle architecture on which the company's new battery-powered lineup will sit will come to the United States, though he didn't have a time frame on that production.

"We wouldn't need a new plant. This plant still has a lot of capacity," he said to a group of journalists after a board meeting of VW brand officials at the Chattanooga factory.

Hinrich Woebcken, who oversees VW's North American region, said production of the seven-seat Atlas that began in December is "a very good step forward" for the company.

"Dealers are asking to deliver more," he said of the midsize SUV, which hit dealerships just a few months ago.

A Volkswagen employee wipes down the sides of cars as they pass her on the assembly line at the Volkswagen Assembly Plant in Chattanooga.

A Volkswagen employee wipes down the sides of...

Photo by Erin O. Smith /Times Free Press.

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Diess said VW is more committed to the U.S. market than its European peers.

"We want to become a relevant volume player," he said, adding that the automaker has "a clear target" of capturing 5 percent market share, or about twice what the company now holds.

But, Diess discounted the idea of bringing a pickup truck to the U.S., saying it's focusing on SUVs and passenger cars. VW also assembles the Passat midsize sedan in Chattanooga, where it rapidly ramped up its headcount and now employs about 3,500 people.

Diess said the company's dealers aren't asking for a pickup.

"This is really an American segment," he said. "It would be risky."

Concerning the I.D. Buzz, an electric vehicle hearkening back to the iconic Microbus which VW announced earlier this month will go into production early next decade, Woebcken said it picks up on heritage and future trends.

Woebcken termed it "an ideal car" that combines emotion with technology. No production location has been decided upon, officials said.

Diess said VW will become "much more electric" after 2020 in the U.S. and worldwide.

The VW official said the company's diesel emissions scandal has caused the brand to suffer a lot.

"We are recovering. We're making good progress in fixing the cars," he said.

Diess said he believes VW will get a second chance from Americans.

"Americans really like VW. Everybody has a story to tell," adding that the company needs to improve profits considerably in the U.S.

Diess said VW is trying harder to understand American motorists.

Plans are to launch two new products in the Americas every year that are specifically tailored to the U.S.

"Dealers love what they've seen," Diess said. "The U.S. plays a major role in our strategy."

He said VW was a small-car company, but it's shifting to markets such as SUVs, where it has growth potential.

The all new 2018 Volkswagen Atlas R Line with 2-liter turbo SUV is on display at the Chattanooga VW manufacturing plant during a media preview on Thursday, April 13, 2017.

The all new 2018 Volkswagen Atlas R Line...

Photo by Dan Henry /Times Free Press.

Meanwhile, Volkswagen's engineering and planning center in Chattanooga is helping the German automaker better understand American motorists as the company puts more decision making into regional hands, said Dr. Matthias Erb, who talked to journalists earlier in the day.

"This has been an unbelievable shift in the culture" of the company, said Erb, a Volkswagen Group of America executive vice president.

Erb, who oversees the innovative, 115-person center that opened a couple of years ago adjacent to the Enterprise South industrial park assembly plant, said the new setup offers "way more chances to get your ideas through."

Erb said he took part in a recent meeting at company headquarters in Wolfsburg, Germany, and the sentiment was "If you think it's right, do it."

In the wake of the diesel emission scandal, the giant automaker decided to decentralize the way it makes some of its decisions.

"We have to learn much more," Erb said. "We're still not there."

Regarding talks about NAFTA and trade, Diess said the discussion has become "more rational. We're taking the message serious."

Also, new Chattanooga plant CEO Antonio Pinto was introduced publicly for the first time. He replaces Christian Koch, who returned to Germany for a new assignment.

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

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