Volkswagen leaders report January sales numbers; talk North American investment, Super Bowl ads
With their sights set on being the country’s largest automobile manufacturer by 2018, Volkswagen of America leaders entered the new year with strong January sales figures, a new attention-grabbing Super Bowl commercial and cautious optimism.
The goal is to increase its North American market share and sell 1 million vehicles per year by 2018.
Part of reaching that goal involves the recent announcement that the company will start producing the Golf at its factory in Puebla, beginning in the first quarter of 2014.
Since 2008, when leaders announced the company would come to Chattanooga, VW has invested $4 billion in the North American market.
The announcement of the Golf being produced in Mexico signifies another $5 billion investment in North America through 2015.
And, although leaders still aren’t getting specific about changes to Chattanooga’s plant, the local factory will play a part in the company’s strategic plan.
“There is significant investment in Chattanooga,” Jonathan Browning, president and CEO, Volkswagen Group of America, said. “All these pieces are putting building blocks in place for the long-term strategy. Chattanooga is an incredible part of the U.S. growth strategy.”
Although leaders haven't confirmed any new local manufacturing plans, some industry insiders said that Chattanooga's plant will eventually have to produce more than the Passat to get maximum profitability.
And local leaders, such as representatives from the Chattanooga Area Chamber of Commerce, have made it known that they would love to have another product built at the local VW plant.
“There’s no specific news I would share in terms of Chattanooga,” Browning said when asked about the potential for building another product locally. “There is hope for expansion, but that is a decision that we will make as we get to further investment.”
January sales
On a Friday morning conference call with media, Browning reported that the company sold 29,018 cars in January.
That’s a 6.7 percent increase over last year’s sales.
The company reached 29 straight months of year-over-year growth, and it had the best January since 1974, officials said.
Leaders sold 8,856 Chattanooga-made Passats, marking that car’s best January ever.
The Jetta sedan continues to lead sales, with 9,089 vehicles sold, and the Beetle and Beetle convertible sold 2,232 units.
Super Bowl ad
Last week, Volkswagen teased two different Super Bowl spots, one called “Sunny Side” and another called “Get Happy”—which has recently drawn some criticism.
“Get Happy” depicts a white man who gets happy and uses a Jamaican accent after he gets a VW car.
VW leaders told Business Insider earlier this week that the character in the commercial is meant to portray an "upbeat perspective and intelligence as he influences his co-workers to 'get happy.' His accent is intended to convey a relaxed, cheerful demeanor while encouraging a positive attitude as the antidote to a tough Monday."
And Browning addressed the topic Friday morning.
He said that the criticism is coming from a minority of commentators.
But Jamaican leaders have come out in support of the commercial, and Volkswagen leaders said they feel good about their new ad and think most people understand the spirit of the commercial.
Diesel
Edmunds.com senior analyst Jessica Caldwell said that Volkswagen’s brand currently controls more than 90 percent of the diesel passenger car market. That gives them an edge in comparison to other mainstream brands, she said.
“With all the hype about advanced drive vehicles, Volkswagen has quietly achieved a significant portion of its overall volume by selling diesels,” she said via email.
Chevy is expected to debut the diesel Cruze next week at the Chicago auto show, and Browning said Friday that he welcomes other diesel vehicles to the market.
Cautious outlook
Moving forward, Volkswagen leaders expect more modest growth, they said Friday.
On one hand, Browning sees some degree of resilience in customer spending, he said.
But there is a continued amount of uncertainty from consumers.
The inconsistency reflects the mixed view from consumers in the marketplace, he said.
“At the same time, it’s also worth keeping in mind the longer-term perspective,” Browning said. “This year, compared to January 2009, we are up 127 percent.”
