Volkswagen Vows to ‘Redefine’ Tarnished Brand in US – Wall Street Journal

Posted: Saturday, April 02, 2016

Herbert Diess, chairman of the Volkswagen brand, talks about the New T-Cross Breeze, during the news event at the 86th Geneva International Motor Show in Geneva on March 1.
ENLARGE

LAS VEGAS—Volkswagen AG’s head of the company’s namesake brand said he told U.S. dealers on Saturday that the German auto maker plans to “redefine” the tarnished Volkswagen brand in the U.S. and eventually grow volume in the market to record levels.

Speaking with reporters after a 90-minute meeting with dealers, Herbert Diess said Volkswagen plans to boost production for U.S. supply in the near-term, and will add new SUVs to the lineup in the future. The company is working to get a new wagon to dealers that can better compete with Subaru, one of the hottest brands in the U.S. and known for all-wheel drive wagons that are fuel-efficient and retain value.

The new wagon, dubbed Alltrack, is due later this year.

Volkswagen and its dealers have suffered in the U.S. in the wake of an emissions scandal that emerged in September. The Environmental Protection Agency disclosed that the German company had cheated on diesel-emissions tests for several years, leading to a management shake-up at the company, and the likelihood that the company will face substantial fines and costs related to recalls and other issues.

Volkswagen brand sales are off 12.5% through three months in 2016 vs. the first quarter of 2015. A significant amount of the company’s lineup cannot be sold due to emissions issues.

Mr. Diess said he had nothing substantive to share with the dealers on how the company will definitively fix the problems related to emissions performance in the U.S. or plans to compensate dealers. Volkswagen is in discussions with U.S. authorities and other regulators around the world in relation to the emissions issue.

Some dealers have discussed suing Volkswagen due to its response to the emissions scandal. Speaking after the meeting, several dealers said the view among many of them is to try working with the auto maker without getting lawsuits involved.

“We would much prefer to take a tack of working together collaboratively,” said Jason Kuhn, a Florida Volkswagen dealer.

Write to John D. Stoll at john.stoll@wsj.com

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