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VW's New CEO Wants To Make American Division Profitable Again

Industry News / 9 Comments

You know, like finally earning a profit for the first time in 15 years.

It may sound hard to believe, but Volkswagen has not made a profit in North America for the past 15 years. Last year for example, the group sold a combined total of 625,068 vehicles – that's less than half the volume of Hyundai-Kia. Chances are, however, that'll soon change following the VW Group recently appointing now former US chief Herbert Diess as group CEO. Diess, who formerly worked as a top BMW executive, has proven himself to be committed to the US market and this won't stop.

In fact, he's determined to make North America profitable once again. Automotive News is reporting about Diess' past and proven abilities to cut costs and reinvest where the money is deeply needed. For example, notice that VW US has begun to move away from its reliance on sedans to crossovers. Yes, there is an all-new Jetta, but at the same time there's the new Atlas and three-row Tiguan, launched last year. At New York last month, two Atlas-based concepts were unveiled, the two-row Cross Sport and the Tanoak pickup truck. Both are probably needed to help further VW's American footprint and, more importantly, make further uses of its Chattanooga production facility in Tennessee, which is currently being underutilized.

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How come? It now builds the Passat sedan and Atlas, but there's room for more production. Another sign of Diess' US commitment is the fact he insisted on traveling to Detroit last January to personally unveil the all-new Jetta. As VW moves further past Dieselgate, a new group of executives is now running the show, and Diess seems to have the right team in place as well to help achieve his goals. "In a phase of profound upheaval in the automotive industry, it is vital for Volkswagen to pick up speed," he said in his first comments as group CEO. Diess' bottom line approach is to streamline the automaker into a more compact structure and, at the same time, he'll personally oversee R&D to ensure VW is where it needs to be with all future technologies.