DETROIT — Volkswagen's U.S. sales peaked in the late 1960s and early 1970s with just two vehicles — the Beetle and Microbus — and haven't reached those levels again because the automaker's executives in Germany thought they knew better than American customers what should be sold and how.
"To be successful in America, you have to be in America," Hinrich Woebcken, CEO of Volkswagen Group of America, told the Automotive News World Congress last week here.
Woebcken, 57, took over the German brand's North American region in 2016 as VW was mired in the diesel emissions scandal. For many years, he said, VW executives couldn't understand why their business models, which had been so successful in Europe and China, didn't translate into similar success in the U.S. And part of the problem was decades spent dismissing U.S. dealers' concerns about product strategy, a problem compounded by the diesel scandal.
"OEMs, I believe, tend to be a little bit arrogant when it comes to understanding the customer," Woebcken said. "In reality, the OEMs don't look into the eyes of the customer. The dealers do."
Woebcken said VW's U.S. recovery from the diesel scandal has been possible in large part because the North American region is able to exercise autonomy from corporate headquarters in Germany.
The diesel scandal, which was exposed in September 2015 and has cost the automaker more than $30 billion, also catalyzed a global reorganization within Volkswagen Group that empowered regions to design, build and market vehicles based on the automaker's global platform strategy. As a result, Volkswagen of America has quickly expanded its crossover offerings, which dealers had been craving.
In the last year, Volkswagen has introduced two three-row crossovers: the Atlas, built in Chattanooga, and the Tiguan, built in Puebla, Mexico. The crossovers have helped balance the brand's formerly sedan-heavy U.S. lineup, with two-row versions due next year to further expand crossover options at its 652 U.S. dealerships, Woebcken said.
The revised product strategy offers a chance to reverse what Woebcken characterized as VW's history of squandered opportunity in the U.S., Woebcken said.
"If you look at the history of the brand in America, if you look at the late 1960s and 1970s ... lots of people bought Beetles and the Microbus," Woebcken said. "A whole generation grew up in those two cars and loved them. We had very good market shares. But since then, if we are honest, we didn't shape this brand into a volume brand like we are all around the world."
Woebcken said he believes that Volkswagen will soon be in a position to compete directly with domestic automakers in the U.S., with products and positioning that make sense from a regional market.
He said: "I stand for really teaching everybody in the company and in headquarters that America is different."
