Goal is to sell 800,000 cars by 2018
All automakers know that, if they want to be big in any place, imported vehicles are not enough, even (or especially) in a huge market like North America. Volkswagen may have tried to solve the problem with its Puebla plant, in Mexico, but it was not enough for its ambitious plans to sell 800,000 vehicles in the USA by 2018. Therefore, it will have to have a facility there. The first step towards the goal is an engine and transmission assembly plant, according to Automotive News, which will possibly be located in North Carolina, as well as the car assembly plant. Besides costs, consumers feel safer and better if the car they are buying is produced locally and helps to pay the wages of their neighbours.
Stefan Jacoby, CEO of Volkswagen Group of America Inc., confirms the plans, but not the location. He said to Automotive News that Mexico and Canada are also good options. Indeed, since Nafta (North American Free Trade Agreement) allows vehicles and parts to circulate among the three countries with no import taxes, production costs will be king on the decision, which will be announced in six months from now.
The new plants are just one of the Five Pillars Jacoby mentions to structure the 800,000 vehicles objective. The others consist of a wider range of new and redesigned products (such as the Routan), new marketing campaigns, streamlining the VW organization and improving the dealer network. Currently, it can handle the sale of up to 400,000 vehicles, but it sold only 230,572 last year. Although these other measures are necessary, the plants will surely be the strongest pillar of them all.