By Jui Chakravorty
DETROIT (Reuters) - Volkswagen AG (VOWG.DE: Quote, Profile, Research, Stock Buzz) will decide in the first half of 2008 whether to go ahead with plans for a U.S. plant, as the German automaker aims to revive its popularity in the country, VW's chief executive of American operations said.
VW, which lost more than $800 million in North America last year and has not been profitable in the region since 2002, plans to increase U.S. sales to 1 million units by 2018, Stefan Jacoby said at the Reuters Autos Summit in Detroit on Monday.
Jacoby, who took his current post in September, said he wants the company to do a better job making products that fit the American market. The automaker sold about 600,000 cars in the United States annually in the 1970s, he said, meaning sales have been cut nearly in half even as the market has grown.
Now, as the U.S. market is expected to shrink and U.S. automakers try to grow abroad, Jacoby wants to expand in the world's largest auto market -- he plans to sell 800,000 units of the flagship VW brand and 200,000 Audis annually by 2018.
"With all the history we have here, and the potential of the iconic brand of VW, we have a good chance to make this strategy come to life," Jacoby said. "The most important thing is, we need much deeper localization."
In considering potential U.S. plant locations, Jacoby said VW would look at the time zone since it would have to be compatible with German work hours, eliminating the West Coast.
He also said VW would look at availability of a good work force before narrowing possible sites to three or four states.
Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) this year chose Mississippi for a $1.3 billion assembly plant set to open in 2010, after states engaged in a bidding war to lure the Japanese automaker. Continued...
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