Volkswagen Group is making a stronger push to revive its underperforming U.S. business, with CEO Oliver Blume identifying rugged SUVs and pickups as a potential path to growth. The strategy would go beyond Scout Motors and could bring body-on-frame vehicles to the Volkswagen and Audi brands in the United States.
VW Sees Opportunity in Rugged SUVs and Pickups
Blume outlined the strategy during a meeting with investors, saying Volkswagen Group lacks vehicles built on ladder-frame platforms, which typically underpin serious off-roaders and pickups that are highly popular in the United States.
According to a transcript of the meeting seen by Bloomberg News, Blume said rugged models similar to the Jeep Wrangler and Ford F-150 could help strengthen the German automaker’s declining U.S. business.
He described rugged SUVs and pickups as an opportunity for the Volkswagen and Audi brands and suggested that such vehicles would be built in the USA. Blume also made clear that the plans extend beyond Scout Motors’ already announced SUV and pickup.
During the meeting’s Q&A session, Blume referred to “profit pools still not played by Volkswagen Group, especially rugged SUVs and pickups.” He also clarified that the plans go beyond Scout, which is owned by Volkswagen Group but operates as a separate, independent U.S. subsidiary.
Audi Could Lead Volkswagen’s U.S. Truck Strategy
VW Group Chief Financial Officer Arno Antlitz supported Blume’s comments by pointing to weaknesses in the company’s current U.S. lineup, including poor margins for popular vehicles such as the Jetta sedan and Taos subcompact SUV.
Both models are shipped from Mexico and are currently subject to U.S. import tariffs.
Antlitz said Volkswagen Group is now looking to move toward richer parts of the market. However, he said “it’s too early to make an announcement” regarding the Volkswagen brand.
Instead, the company plans to initially enter segments “which are more promising in terms of margin,” a statement that points toward Audi.
The strategy follows previous rumors that Audi is considering an off-road SUV. Audi CEO Gernot Dollner recently confirmed during a roundtable discussion with journalists that the company is evaluating a rugged off-road SUV.
Volkswagen Group Plans a Major U.S. Strategy Shift
The comments from Volkswagen Group’s leadership provide a clearer picture of how the automaker plans to reshape its U.S. lineup. Rather than continuing with the same one-size-fits-all global-car strategy, the company is considering vehicles specifically tailored to the needs of American buyers.
Scout Motors could play a major role in those U.S. plans. Its factory in South Carolina would give Volkswagen Group a new U.S. manufacturing site for the types of vehicles Blume is targeting.
However, Blume did not say whether future Volkswagen or Audi models would share Scout technology or plant capacity.
VW Faces Pressure to Turn Around Its U.S. Business
Volkswagen Group is under growing pressure to improve its U.S. operations as its China business, once its most profitable, struggles.
Last week, Volkswagen finally received the support of labor leaders in Germany to cut as many as 100,000 jobs globally and half of its model lineup as profits decline, partly because of high manufacturing costs at home.
Volkswagen Group currently holds around 4% of the U.S. market, while Audi’s U.S. sales fell 17% in the first half of the year.
