CHATTANOOGA, Tenn.— Volkswagen AG’s plan to cede more control to its U.S. operation in the wake of its costly emissions scandal is getting a boost from an unlikely source: a spacious sport-utility vehicle that executives say is designed to appeal to American soccer moms.
The German auto maker is in the final stages of developing the seven-seat SUV, which will be built in Tennessee, use a meaty gasoline engine and hit dealer lots early next year. Volkswagen’s North American chief, Hinrich Woebcken, said in an interview the vehicle will compete head on with SUVs from Honda Motor Co., Ford Motor Co. and Toyota Motor Corp.—three auto makers with far more U.S. market share and a heavier focus on light trucks.
For now, the vehicle is code-named B-SUV. But Mr. Woebcken said officials at Volkswagen’s headquarters in Wolfsburg, Germany, will let the U.S. unit give the vehicle a distinct name for the region by the time it goes on sale, and that name will differ from the name the vehicle carries in other markets. The new moniker, he said, will be “a solid American name.”
Many of Volkswagen’s vehicles share the same name around the world, he said.
He declined to disclose the new name because Volkswagen’s lawyers are still vetting at least one option. Dealers in the U.S. have been told about the naming strategy, but haven’t been given specific details, two dealers said.
Volkswagen has launched SUVs in the past decade that were designed for global markets, including the small Tiguan and a Touareg, which includes a costly five-seat model sharing parts and design cues with a Porsche counterpart. The names of those vehicles are used globally but have fallen flat with buyers accustomed to shopping for family SUVs dubbed Explorer, Pathfinder, Pilot, Highlander or Traverse.
Driving the B-SUV on public roads earlier this week, Mr. Woebcken said the car will compete head on with those established products and will have the added benefit of having been crafted by German engineers who focused on driving dynamics. “Soccer moms will love this car,” he said while cornering hard and fast through a roundabout near Volkswagen’s factory here on Monday.
While the job of naming a vehicle might seem minor, Mr. Woebcken says it is evidence “Wolfsburg is willing to let go.” Hired in January to hem together Volkswagen’s sprawling operations in the region—which include factories in Mexico and the U.S., more than 1,000 engineers in both countries, and marketing staff in Virginia—Mr. Woebcken hopes the ability to give a U.S. vehicle its own unique name is the start of an “eye-to-eye” relationship with headquarters.
While Volkswagen’s pricier Porsche and Audi brands have thrived in the U.S., especially as those brands added SUV models, the namesake brand has long struggled to gain traction. Once aiming for 800,000 vehicles by 2018, the company has just 1.7% of the U.S. market, making the No.2 auto maker in terms of global sales a much smaller player in the market than Japan’s Subaru or South Korea’s Hyundai Motor Co. and Kia Motors Corp.
The company’s reputation and sales took a hit in September when a long-running scheme to cheat on diesel emissions tests was disclosed. Diesel engines have long been Volkswagen’s focus in the U.S., which is dominated by gasoline engines, and the scandal has forced the auto maker to agree to billions of dollars in settlements and led the auto maker to back away from making diesel a centerpiece of its future strategy.
Mr. Woebcken said Volkswagen also is backing away from firm volume targets for the near term, and now focusing on 2025. In the near-term, the company aims to update its sedans, add an all-wheel-drive wagon to compete with Subaru and extend the wheelbase of the Tiguan, which is among Volkswagen’s most popular models in the U.S.
The auto maker will start building and selling new electric vehicles in North America by 2020.
Article courtesy of: http://www.wsj.com/articles/volkswagen-to-build-seven-seat-suv-in-tennessee-1469109497?mod=pls_whats_news_us_business_f