VW Looking at Smaller SUV

Volkswagen is reeling from a sharp 15-percent slide in U.S. sales last year. Volumes that peaked at 330,000 vehicles in 2002, dropped to just 256,000 cars and light trucks in 2004. But the automaker's U.S. boss, Len Hunt, is betting that a flood of new products, creative incentives and aggressive quality control efforts will "stabilize" the situation this year, and start rebuilding momentum in 2006. VW rolled out its Ragster concept at this week's Detroit auto show, and pulled the covers off an all-new Jetta in Los Angeles earlier this month. The company plans to deliver nine new models to U.S. showrooms over the next 18 months, including next-generation versions of the Jetta, Passat and Golf, and an updated Beetle. Beyond that, stressed Hunt, "We need more SUVs, and we're working on a smaller one," when compared to the current Touareg, which would likely hit market in 2007. Hunt also confirmed that a sports car is being worked on "very seriously," though he cautioned that this is not an approved program.

VW's sales slide resulted from a variety of factors, suggested Hunt, including poor planning. The automaker has tended to launch a variety of products in a quick burst, such as the one planned for the next 18 months. Then it sits back and waits for awhile before adding new models or refreshing old ones. Adjusting that "cadence" is a high priority, Hunt added, so that there'll always be new models ready to reach U.S. shores. Meanwhile, quality control problems also hurt the automaker, especially those that took awhile to fix. A suspension problem affecting several models took almost five years to resolve. But a new "root cause analysis team" has been created to speed things up. If a potential quality problem turns up, the team heads into the field to see how serious the situation is. The target, said Hunt, is to take no more than "18 weeks from analysis to fix."