Only Americans of a certain age probably remember that the Volkswagen Beetle was the best-selling imported car in the United States and that the hottest ride to a Grateful Dead concert was a Volkswagen Microbus.
Volkswagen is trying to use some of that nostalgia in its latest push to regain the status and sales it enjoyed in the U.S. during the Beetle and minibus heyday in the 1960s. But this time it is hoped that its top models will be electric.
The German car manufacturer is the second largest in the world after Toyota, but is a niche player in the USA. Part of its plan to revive its successes here is to bet on a new electric model similar to the Microbus, the ID.Buzz, and to revive the Scout brand with a line of electric pickups and sport utility vehicles.
Last week, as giant earthmoving machines kicked up clouds of dust, Volkswagen executives and local officials gathered near Columbia, South Carolina, to dedicate the site of a factory that will build vehicles bearing the Scout badge for the first time since 1980.
Volkswagen is one of several foreign automakers that see electric cars and the turmoil they have caused as a way to challenge the dominant players in the United States. Volkswagen, which also owns Audi, Porsche, Bentley and Lamborghini, aims to at least double its U.S. market share by the end of the decade from its current meager 4 percent.
“This market is going electric and everyone is starting from scratch,” Volkswagen Chief Financial Officer Arno Antlitz said in an interview. “This is our unique opportunity to grow.”
Electric vehicles have already rocked industry rankings and given Volkswagen and other foreign automakers a boost. Battery-powered SUVs and sedans helped Hyundai Motor and its sister brand Kia overtake Stellantis, the maker of Jeep, Dodge, Chrysler and Ram, as the fourth-largest automaker by sales in the U.S. last year.
“Electric vehicles help our brand be seen as a technology leader,” said José Muñoz, Hyundai’s chief operating officer. They also attracted a better educated and wealthier customer than did the South Korean company’s gasoline vehicles, he said in an interview.
The list of companies that dominate electric car sales is very different from the top rankings for overall U.S. sales, suggesting a future in which a different group of companies will dominate.
The top five companies in the United States for all engine types are General Motors, Toyota, Ford Motor, Hyundai and Stellantis. When it comes to electric cars, Tesla is number 1 by a wide margin, followed by Hyundai, GM, Ford and Volkswagen. Toyota is a small player in electric cars.
“Just because you’ve been around for 120 years doesn’t mean you’re going to have anything in this new market,” said Steven Center, the chief operating officer of Kia America.
Volvo Cars is another company looking to capitalize on the changes brought about by electric vehicles. The Swedish automaker, majority owned by Geely Holding Group of China, reported a 26 percent increase in U.S. sales last year.
Much of this growth came from hybrid vehicles, which have a gasoline engine and can travel shorter distances using batteries. But Mike Cottone, Volvo Car’s president for the U.S. and Canada, said he sees hybrids as a path to all-electric vehicles.
Later this year, Volvo will begin selling a Chinese-made all-electric compact SUV, the EX30, which will start at $35,000. The company will also begin deliveries of the EX90, a seven-seat SUV made in South Carolina that will retail for approximately $80,000.
For luxury car buyers in particular, Mr. Cottone said, “there is a lot of room for growth in the electric vehicle segment over the next few years.”
Volkswagen has tried to build a larger presence in the United States since the 1970s, and analysts are skeptical that this time will be different. “I’ve seen Volkswagen set these goals,” said Michelle Krebs, executive analyst at Cox Automotive.
The established car manufacturers will not be weaklings. GM and Ford are also investing heavily in electric vehicles, while Toyota has said it will begin production of a large electric SUV in Kentucky next year.
Ms. Krebs pointed out that U.S. auto sales are growing slowly, making the battle for market share largely a zero-sum game. “There’s that little bit of growth that everyone strives for,” she said.
Volkswagen’s last major foray into the United States ended in scandal. In the early 2000s, the company tried to sell Americans cars with “clean diesel” engines. It promoted the fuel, which was used far more frequently in European cars than in American cars, as being more environmentally friendly than gasoline.
But the campaign collapsed in 2015 when US regulators discovered that Volkswagen had used software in its vehicles to cheat on emissions tests. In reality, cars pollute the environment just as much as long-distance trucks.
The scandal had an advantage for Volkswagen. This led the company to invest early in electric vehicle technology, building cars designed from the ground up to run on batteries rather than making cumbersome modifications to gasoline models. In Europe, according to Schmidt Automotive Research, Volkswagen’s various electric brands together outperform the Tesla brand.
Pablo Di Si, President of the Volkswagen Group of America, is responsible for doubling Volkswagen sales in the USA. Mr. Di Si, who is originally from Argentina, said he plans to apply the same strategy he used in overseeing the company’s operations in Brazil, where Volkswagen’s market share has risen from 9 percent to more than 16 percent.
“Look at the segments that you think will be successful in 10 years,” Mr. Di Si said in an interview. “What are your gaps in the product portfolio? And then you start adding products for those specific markets.”
In the United States, this will likely include gasoline and hybrid cars as well as purely electric vehicles, he said. Volkswagen plans to import the ID.7, an electric sedan, and the ID.Buzz. Mr Di Si hinted that there might also be a new electric vehicle based on the Beetle’s design. The last version of this car sold in the US was the 2019 Beetle.
Volkswagen is building a $5 billion factory in Ontario to supply batteries to its factories in Chattanooga, Tennessee, and Puebla, Mexico, which together will produce at least 80 percent of the company’s cars sold in North America. This will help buyers of Volkswagen, Audi and other brands of cars qualify for federal tax credits of up to $7,500 per car.
Scout will fill a big gap in Volkswagen’s portfolio: pickup trucks are among the most popular vehicles in the USA. By reviving the Scout, one of the first passenger cars that could drive on both bumpy dirt roads and city streets, Volkswagen hopes to attract buyers who typically buy off-road-capable vehicles from U.S. brands such as Chevrolet, Ford and Jeep.
The South Carolina facility will emphasize the “Made in America” atmosphere when the first Scouts hit the market in late 2026. Volkswagen inherited the Scout brand when the company’s truck subsidiary, Traton, acquired Navistar, a US company previously known as International Harvester, in 2021.
The new Scouts may adopt some parts used in other Volkswagen vehicles, company executives said, but the design will differ from existing vehicles such as the Chattanooga-made ID.4 electric SUV. Scout plans to unveil prototypes this year.
A stronger presence in the United States is “a strategic imperative,” said Scott Keogh, CEO of Volkswagen’s Scout Motors division, in South Carolina last week.
Outside the US, Volkswagen is a giant with a market share of 26 percent in Europe and 15 percent in China. But the company is under intense pressure in China, where sales of electric vehicles are growing rapidly, allowing BYD and other Chinese automakers to gain market share from foreign automakers. To compensate, Volkswagen needs growth in the USA.
Volkswagen wants to have “a strong global presence,” Mr. Keogh said, “not an isolated presence where it is only strong in one region.”
Source link
2024-02-20 21:15:19
www.nytimes.com
