Saturday, July 07, 2007

Volkswagen considers a US plant following weak US Dollar

The last time Volkswagen had a production plant in the US was in 1978, when Volkswagen bought a partially completed factory from Chrysler. Volkswagen was actually one of the first foreign car makers to have a factory in the US. Ironically, they were also the first to pull out. Volkswagen managed to churn out 1.5 million vehicles in the plant's short lifespan. It closed down in the late 80s, and with it the chance of another Volkswagen plant this side of the Atlantic or Mexican border.

But it looks like that all about to change. Martin Winterkorn, Volkswagen CEO, revealed in an interview with the German weekly Focus that "If the dollar exchange rate stays at its present level, [Volkswagen] will have to begin thinking about a factory in North America."

And in an attempt to "get closer to customers", Volkswagen is also setting up a second administrative hub near Detroit. With this move, Volkswagen hopes to improve sales and remain competitve in the US market. It will also mean cheaper models.

This announcement comes just a few days after Stephan Jacoby was announced as Volkswagen of America's president and CEO.

Winterkorn did not offer a timeline as to when the plant may be operational.

Source: Forbes

1 Comments:

Anonymous Ben C said...

This is exciting news. On the same topic, I saw a news story the other day in the Detroit News: http://www.detnews.com/apps/pbcs.dll/article?AID=/20070606/AUTO01/706060352

I'm wondering if the "unnamed European Automaker" might be VW. It's not hard to put two and two together here. Magna's plant in Austria is incredibly flexible building everything from the Chrysler 300, to the BMW X3, and the Saab 9-3 Cabrio. They could do something similar here perhaps, and build the Passat and Touareg/Q7 for example. They won't make money assembling Rabbits here like last time. They need something bigger with a higher margin.

Hopefully if they decide to go through with it, they learn from their past mistakes at Westmoreland and are successful.

Tue Jul 10, 05:19:00 AM  

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