Monday, August 01, 2005

Volkswagen unveils plans for four new vehicles; U.S. dealers eagerly await minivan and more

Text from AutoWeek.
Volkswagen of America Inc. will leap into four new product segments by the end of 2007, part of an all-out effort to rebuild the VW brand in the United States.

Long-suffering dealers will get a convertible, a small SUV, a minivan and a big luxury coupe.

The plans were unveiled to dealers July 15 by Wolfgang Bernhard, the energetic former Chrysler group COO who now heads the global VW brand in Wolfsburg, Germany.

Bernhard brought down the house at the annual dealer meeting in Dallas, taking the wraps off three vehicles and showing pictures of a fourth.

The four models on the way are:

1. A 2+2 convertible with an electric foldaway roof that would be a halo vehicle.

2. A small SUV to compete with the Jeep Liberty and Honda CR-V.

3. A seven-seat minivan - a year after VW killed plans to build the Microbus minivan.

4. A four-door "coupe" similar to the Mercedes-Benz CLS that would be placed above the Passat sedan.

All four vehicles will be introduced by the end of 2007, says Bob Grace, chairman of the dealer council and owner of Southpoint Volkswagen in Baton Rouge, La.

"The dealer group is fired up," Grace says. Bernhard "gave us a no-nonsense view of his vision to bring us to a full-range franchise in a couple of years."

VW division's U.S. sales have been on a sharp decline, falling 15.4 percent in 2004 and down 23.5 percent during the first six months of this year. The company is in the midst of replacing or doing face-lifts on all its major vehicles.

Bernhard took over as head of the VW brand this year and has made the United States a priority. VWoA boss Len Hunt says Bernhard plans to bring exciting vehicles to North America and brought the proof to Dallas.

"Bernhard was just spectacular," Hunt says. "He was the star of the show. He was very frank with the dealers. He made a commitment to North America that was very genuinely put across."

Convertible first

The first vehicle to arrive will be the convertible, which goes into production in Portugal in January and will be on sale in the United States in May. For now, it's called the Concept C - after the concept car that debuted at the Geneva auto show in 2004. Hunt says the production name will be announced at the Frankfurt auto show in September.

"It is an awesome car," says Chris Curran, owner of Curran Volkswagen in Stratford, Conn. "It has a hard top. It will create a lot of excitement because it is different, new and designed from scratch to be a convertible."

The Concept C is larger than a Jetta but smaller than the redesigned 2006 Passat that began arriving in dealerships last week. Hunt says he expects annual sales of about 15,000 convertibles in the United States. Pricing hasn't been set but is expected to be about $30,000.

SUV, minivan fill voids

Both the small SUV and the minivan were designed with the United States in mind, dealers say. The SUV has been described by Curran as a "little brother of the Touareg," VW's SUV.

"The entry-level SUV is one of the hottest markets now, and we saw a new SUV that everybody is excited about," Curran says.

Dealers complained loudly to VW executives in Germany after the Microbus was killed last year. The new minivan is a different concept from the retro-looking Microbus, dealers say.

They say they need a seven-seat minivan to retain VW buyers with growing families. Bernhard provided only sketchy details of the minivan. Dealers saw only a photograph.

Hunt says Bernhard told dealers: "I know you want a seven-seater, and I'm committed to going into that segment."

Above the Passat

Hunt says the four-door "coupe" will be above the Passat but won't be as expensive as the Phaeton luxury sedan. The Phaeton is priced at $67,355, with shipping. The VW car is similar in concept to the Mercedes-Benz CLS, which is styled as a sleek two-seater but has four doors.

"This is another area where we do not compete," Curran says. "There are a lot of BMWs, Mercedes-Benzes and Acuras sold around here. We need a presence for our owners" in the segment.

Prices weren't disclosed. Hunt says, "It will still be affordable."

VW last week began delivering the 2006 Passat to dealers. The new Passat will be a major step in reversing what Kevin Eckhart, owner of Santa Barbara Volkswagen in Santa Barbara, Calif., says "has been a long dry spell."

"I got my Passats today," he says, "and once they see them, drive them and see the pricing, it will be no problem selling them."

As for the future, Eckhart and other dealers feel more secure with Bernhard at the helm.

"Wolfgang Bernhard brings a different North American viewpoint to Germany," Eckhart says. "He is a proven performance in North America, and he's set to prove we can win."

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