Volkswagen considers U.S. production, new strategy

Volkswagen of America is in the process of reinventing itself here in the U.S. in an effort to regain market share, while simultaneously trying to stem the losses caused by fluctuating exchange rates. As reported before, the first major step the automaker is taking here in the States is to relocate its corporate headquarters from Detroit to Herndon, Va. The move, according to VW, places the automaker in a good location to understand consumer's taste, while providing the company a fresh start. The move is scheduled to begin sometime in April, with completion by the end of 2008, and will result in the loss of some 400 jobs in Michigan.
Also under consideration is the possibility of making more vehicles here in the U.S., specifically tailored for the market. Production of models that take aim at the Corolla's and Accord's of the world is part of the strategy, along with new small-sized 'utes that will benefit from environmentally-focused powertrains (ahem, diesels?).

You can read Volkswagen's full press release after the jump and check out Michelle Krebs' article over at AutoObserver by clicking the "Read" link below.

[Sources: Volkswagen, Automotive News – Sub. Req., AutoObserver]


Volkswagen of America with new US strategy
Corporate headquarters to relocate near Washington

Jacoby names five pillars of US strategy
Wolfsburg / Auburn Hills, 06 September 2007 - Volkswagen of America, Inc. announced a new strategy for the US market on Thursday, including the relocation of corporate headquarters from Auburn Hills, Michigan, near Detroit, to Herndon, Virginia, in the vicinity of Washington.

Stefan Jacoby, the incoming President and CEO of Volkswagen of America, explained: "The new strategy is based on five pillars: the development of products specifically designed for the US market, a change in brand positioning, realignment of the dealer network and our own organization and, finally, the possibility of local production to reduce dependence on exchange rates."

Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG, commented: "The US market has top priority for Volkswagen." Relocation will begin in April 2008 and will have been completed by the end of the year. The move includes Volkswagen of America as well as other affiliated operations such as Audi of America, Audi Financial Services and Volkswagen Credit.

Jacoby said: "The move underlines our determination to play a new and stronger role on the US market. This is a logical step, as the majority of our customers are located on the East and West Coast of the United States, where drivers display a pronounced openness towards modern and exceptionally environmentally sound powertrain strategies such as those our Group is developing worldwide. So it makes sound sense to support this by relocating to the East Coast."

Jacoby announced a workforce realignment, a new strategic direction to connect better with customers and a more efficient organization: "We need fewer redundancies, less bureaucracy and more creativity." Approximately 600 of the present 1,400-strong workforce will remain at the current location in Auburn Hills to support operations such as the call center and technical services such as vehicle finishing. Some 400 positions will be transferred to the new headquarters and the remaining positions will be eliminated. The company has already taken steps to reduce its workforce through natural fluctuation and voluntary separations.

Volkswagen of America has approximately 600 Volkswagen dealers and some 250 Audi dealers in its US network. Dealer profitability is to be increased. According to Jacoby: "Dealers play a key role in the company's growth going forward. They are close to the customers and know what customers want. As a creative team we will be able to fill those needs with strong new products."

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