With plans to begin manufacturing electric cars in North America in 2021, Volkswagen intends to establish a strong presence in the North American market.
Plans are to sell more electric cars, SUVs, crossovers, and sedans as part of a new strategy announced earlier this year to significantly increase plug-in car sales.
WV will be also rolling out its new Atlas SUV – so far not a plug-in – and a larger, cheaper version of the Passat sedan will be tailored to meet American consumer tastes for these types of vehicles.
The German automaker is ready to “evolve from a niche supplier” into a successful mainstream carmaker in the region. The move goes back several years, long before the diesel emissions scandal, with VW struggling to extend its dominance in Europe and China to the U.S.
“We will be significantly stepping up our activities in the U.S.A.,” VW brand chief Herbert Diess said. “Our goals are high and our strategy is very ambitious.”
VW currently assembles the Jetta sedan, the Golf hatchback and the Beetle in a factory in Puebla, Mexico. Its only factory in the U.S. is in Chattanooga, Tenn.
The North American push is part of a sweeping overhaul to improve profitability at VW, one of the auto industry’s least efficient brands, according to Automotive News. Under the new strategy, the German carmaker’s biggest unit plans to more than triple its profit margin to six percent. Volkswagen will launch mass production of plug-in electrified vehicles in 2020, based on its new electric-vehicle manufacturing architecture, MEB. The company is targeting one million electric vehicle sales by 2025.
Efforts to boost the profit margin are critical as the company faces at least 18.2 billion euros ($19.3 billion) of fines and repairs in the wake of the emissions crisis. To help cover losses and the cost of developing battery-powered and self-driving technologies, VW reached an agreement with workers last week, to cut as many as 30,000 jobs worldwide and slash 3.7 billion euros of expenses.
The electric-car transition will be funded in part by eliminating more than 2.5 billion euros ($2.66 billion) of costs by scrapping underperforming conventional models. The company said it will keep its annual investment budget consistent at about 4.5 billion euros ($4.78 billion).
“Over the next few years, Volkswagen will change radically. Very few things will stay as they are,” Diess said. “The electric car will become the strategic core of the VW brand.”