Volkswagen vows to stick with the US despite emissions-rigging slump –

Posted: Sunday, April 03, 2016

Volkswagen has told its dealers in America that the carmaker is still committed to a mass-market strategy in the US, despite the damage done to its reputation during the emissions-rigging revelations of last year.

The German car maker is trying to stem discontent among its retailers as it negotiates with regulators about the fate of about 600,000 diesel vehicles in the US that were rigged to cheat on emissions tests.

Sales of Volkswagen-branded cars and trucks slumped 10.4pc in the US in March, as customers continued to shun the firm following its admission in September that as many as 11m vehicles worldwide were affected by the “defeat devices” scandal.

Herbert Diess, global head of the Volkswagen brand, and Hinrich Woebcken, interim chief executive of the company’s US sales unit, met with the dealers at the weekend during a convention in Las Vegas.

“We are working to redefine the Volkswagen brand in the United States by strengthening our management team, our partnerships with dealers, and our product portfolio,” Mr Diess told reporters after the meeting. “We want to grow the volume consistently beyond past levels, and we will do this with our partners, the dealers.”

VW also said it has doubled production of an all-wheel-drive station wagon to challenge the fast-growing Japanese marque Subaru in the States.

Ahead of the meeting, many of Volkswagen’s 652 US dealers met to choose a panel that will negotiate with the firm about compensation for the emissions rigging scandal, which they hope will be agreed without resorting to ligitation.

Volkswagen’s namesake brand sold 349,440 cars and light trucks in the US last year. Less than a decade ago, the firm had hopes of selling about 800,000 vehicles a year by 2018. Based in part on that plan, Volkswagen dealers have invested $1bn to upgrade their stores.

Last week, the Federal Trade Commission announced it is starting legal proceedings against Volkswagen for “deceiving” American consumers.

A federal judge has given the firm and regulators until April 21 to set a plan for removing the affected cars from the road.

The VW group, which includes the Audi, SEAT and Skoda marques, posted its first quarterly loss in a decade in October as a result of the scandal, after it took a €6.7bn provision to help cover the cost.

The firm has also replaced its chief executive Martin Winterkorn and several senior staff following the emission revelations.


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