Volkswagen Group of America

Volkswagen Group of America, Inc. (sometimes referred to as Volkswagen of America, abbreviated to VWoA), is the United States operational headquarters, and subsidiary of the Volkswagen Group of automobile companies of Germany. VWoA is responsible for five marques: Audi, Bentley, Bugatti, Lamborghini, and Volkswagen cars. It also controls VW Credit, Inc. (or VCI), Volkswagen's financial services and credit operations.

In Germany, the parent company Volkswagen AG is responsible for eight marques of the group, from six European countries: Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Škoda and Volkswagen Commercial Vehicles.

As of March 2008, VWoA has 20 operational facilities, spanning coast to coast, and its primary objective is "to offer attractive, safe and environmentally sound vehicles which are competitive on an increasingly tough market and which set world standards in their respective classes".

On July 16, 2008, Volkswagen AG announced plans to build its first production facility in the United States since closure of the New Stanton, Pennsylvania plant in 1988. The new facility, due to open in 2011, will be built in Chattanooga, Tennessee.

History

Foundation

Formed in April 1955 in Englewood Cliffs, New Jersey to standardize dealership service in the United States, it grew to 909 Volkswagen dealers in the US by 1965 under the leadership of Dr. Carl Hahn. Under him and his successor as president of Volkswagen of America, J. Stuart Perkins, VW's U.S. sales grew to 569,696 cars in 1970, an all-time peak, when Volkswagen captured 7 percent of the U.S. car market and had over a thousand American dealerships. The Volkswagen Beetle was the company's best seller in the United States by a wide margin.

From then on, however, intense competition from American and Japanese automakers caused VW sales in America to fall as much as 87 percent between 1970 and 1992, despite the introduction of new front-drive models in 1975 to replace the Beetle and its rear-engined, air-cooled stablemates. As a result, the number of dealerships in the U.S. was also reduced to 630 by the mid-1990's. As of 2007, there were 596 operating Volkswagen dealerships in the country.

New Stanton and Auburn Hills

VW decided to open an assembly plant in New Stanton, Pennsylvania in 1978. This was the first modern venture by a foreign automaker at making cars in the USA. Unfortunately, due to unfavorable exchange rates, and the fact that the factory mostly built Golf hatchbacks while Americans wanted Jetta sedans,[citation needed] the plant closed in 1988 (very few Jettas were made there in 1987-1988, but this failed to help the plant). In the early 1980s, the manufacturing division and the sales division were merged, and Volkswagen of America moved to Troy, Michigan as a result, settling in Auburn Hills, Michigan in 1991.

1990's uncertanties

Volkswagen of America's sales hit rock bottom in 1993, with fewer than 50,000 cars sold that year, and many observers expected VW to quit the United States. Sales began to recover the following year with the introduction of the third generation of the Golf and Jetta. By the end of the decade, thanks to effective advertising and the launch of more competitive new products, including the New Beetle in 1998, the VW brand was back on firmer ground. Volkswagen of America went on to sell 355,648 cars in 2001, its best year since 1973.

2000's

In the 2000's sales have tapered off somewhat due to competition, quality issues and delays in product introductions, and VW's U.S. sales for 2005 totaled 224,195 - a reduction of about 37 percent from four years earlier. New models for the 2006 and 2007 model years, such as the Passat, Rabbit, and GTI resulted in a sales growth of 4.9% for 2006 with sales of 235,140 vehicles. Profitability still remains an issue, though; Volkswagen of America has not turned a profit for its parent company since 2002. In January 2007, Volkswagen of America president Adrian Hallmark publicly stated that he planned to get the subsidiary back to profitability in two to three years. He hoped to introduce new models for North America, and develop new marketing to encompass the whole brand as well as individual cars. Stefan Jacoby soon replaced him, and Volkswagen of America continued to look at new products to add to its lineup.

In the meantime, a new advertising agency, Crispin Porter + Bogusky, has helped rejuvenate VW's presence in the U.S. as well. Its ads for the fifth-generation GTI have sparked interest in the brand, not seen since the launch of the New Beetle, and ads for the fifth-generation Golf/Rabbit hatchback have translated into initial strong sales for that model. Due to new air pollution rules promulgated by the United States Environmental Protection Agency (USEPA), the diesel powered VWs with TDI-PD technology can no longer be produced after December 31, 2006. For the 2009 model year, VW will be introducing a new generation of diesels, based on common rail technology. These will meet air pollution standards in all 50 states. The first of these units was made available for sale in August 2008. VW sold 2050 Jetta Sedan TDIs and 361 Jetta Sportwagen TDIs that first month.

New Headquarters in Virginia

On September 6, 2007, Volkswagen of America announced it would relocate its North American headquarters to Herndon, Virginia. Volkswagen sales are particularly strong in the Mid-Atlantic region, as well as both coasts. The company indicated that it is important for them to locate in a region where their customer base is strongest. Presently, the Big Three dominate the Midwest US, especially Metro Detroit where the company was formerly located.

Volkswagen of America’s move from Auburn Hills to Herndon began in April 2008 and will be completed by the end of next year, the company said. It said that 600 of the current 1,400 staff will remain at Auburn Hills in call center, and technical services positions, while 400 jobs will be transferred to Virginia. About 150 employees in Michigan are expected to move to Herndon, Volkswagen of America President and CEO Stefan Jacoby said. The four-hundred remaining jobs will be cut.

The state of Virginia, among 14 locations that Volkswagen of America considered for the move, offered Volkswagen $6 Million in incentives that will be awarded pending Volkswagen's fulfillment of employment and other various quotas.

New manufacturing plant

On the July 15, 2008, after an intense, months-long battle between Huntsville, Alabama, a site in Michigan and Chattanooga, Tennessee, the company's supervisory board chose Chattanooga as the location for the new plant. This $1 billion investment will be producing about 150,000 cars a year by its slated opening in 2011, playing a major role in the company's strategy to gain more than 6% of the car market, or about 800,000 cars on top of the 230,000 it produced in America in 2007, by 2018. This plant will also become Volkswagen Group of America's manufacturing headquarters in the USA. The weak US dollar and the high cost of labor in Germany were some of the reasons behind Volkswagen's decision to build a US manufacturing plant.

Current US facilities

As of March 2008, Volkswagen Group of America has the following 20 "Operational Facilities" across the US:

Auburn Hills, Michigan - former Corporate Headquarters

Herndon, Virginia - new Corporate Headquarters

Hillsboro, Oregon - VW Credit, Inc. Center

Palo Alto, California - Electronics Research Laboratory (ERL)

Westlake Village, California - Product Test Center

Santa Monica, California - Design Center

Ontario, California - Parts Distribution Center

San Diego, California - Port/PPC

Maricopa, Arizona - Proving Ground

Golden, Colorado - VW Credit, Inc. and Technical Center

Fort Worth, Texas - Parts Distribution Center

Houston, Texas - Port/PPC and Parts Distribution Center

Libertyville, Illinois - VW Credit, Inc. Center

Pleasant Prairie, Wisconsin - Parts Distribution Center

Jacksonville, Florida - Parts Distribution Center

Brunswick, Georgia - Port/PPC

Cranbury, New Jersey - Parts Distribution Center

Allendale, New Jersey - Technical Center

Englewood Cliffs, New Jersey - Product Liaison

Davisville, Rhode Island - Port/PPC

Future models

The following models are planned or considered to be introducted to the American market in the near future:

BlueSport Roadster (2012)

Eos Mk2 (2015)

Golf Mk7 (2014)

Jetta Mk7 (2015)

New Beetle Mk2 (2011)

New Compact Sedan/Jetta Mk6 (2010)

New Midsize Sedan (2011)

Phaeton Mk2 (2013)

Polo Mk5 (2012)

Tiguan Mk2 (2015)

Touareg Mk2 (2010)

up! (2012)