Volkswagen AG is building the business case for a large sports utility vehicle in the United States, according to top executives at the German carmaker. The vehicle is considered to be vital to the carmaker’s plan to nearly double the VW brand's sales in the US to 800,000 units by 2018. VW unveiled the CrossBlue -- a three-row, seven-seat concept SUV -- in January at the Detroit Auto Show.
According to Ulrich Hackenberg, VW's board member for product development, the carmaker is contacting customers and dealers to estimate potential sales of the SUV and to build a business case. Michael Macht, VW's board member for production, said that right now, the cost of the business case remains a little too high so far.
Macht remarked that the expected cost tends to drop as the business case is refined, adding that it is how it always works. Macht said that VW would build the SUV in North America, with Mexico and Chattanooga eyed as possible production sites.
VW has been producing the Passat sedan in Chattanooga since 2011. According to Macht, a new plant in the US is an option, depending on available local subsidies. He discounted Canada as a possible manufacturing location since it is too far from VW's supply base.
Macht disclosed that the German carmaker has yet to discuss possible incentives for a second assembly line at the Chattanooga plant, which could produce up to 170,000 units annually and builds about 135,000 Passats per year. The Chattanooga plant can still accommodate a second assembly.
Meanwhile, VW sales chief Christian Klinger said that the reception of the CrossBlue concept “was really positive" at the Detroit auto show. He remarked that VW may build two or three more nameplates tailored to US buyers. VW has already tailored vehicles like the Jetta and Passat to US customers. Klinger said that the SUV is supported “from the top of the company down." Following the success of the US version of the Passat, VW chief executive Martin Winterkorn revealed a new goal -- to establish the carmaker in another core segment.