Despite historically poor performance there, Europe’s biggest carmaker says it will be forging ahead
For years, Volkswagen’s poor performance in the US fuelled debate among the group’s managers about whether Europe’s biggest carmaker should simply pack up and leave.“We are going nowhere,” Diess said in a recent interview with CBS’s 60 Minutes. “No, we have to come back in the US. We have to become relevant in the US. And we are in the right way.”
Volkswagen and its brands including Audi, Porsche and Bentley have long focused on Europe and growing in China, which now accounts for roughly 40% of the group’s total sales. While this approach yielded healthy profits, it’s not ideal positioning at the moment. China’s geopolitical tensions and interest in cultivating home-grown automotive champions make the US a relatively attractive place for VW to prioritise investment. Buyers there spend big on luxury cars and regularly fork over more than $50,000 on large SUVs and pickups. The latter segment is also going electric. When 60 Minutes pointed out that VW doesn’t have plans to make an electric truck, Diess quickly replied “not yet”.
During my recent road trip through the American Southwest, I was surprised how many Model 3s we saw, and Tesla’s new factory in Austin, Texas, will churn out more Model Ys. During a Wednesday evening earnings call, Elon Musk said Tesla is on track to expand production to more than 1.5-million vehicles this year, implying more than 60% growth at a time when VW and others are struggling to source enough wire harnesses and semiconductors.
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