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VW puts Americas at heart of turnaround plan

Tuesday, November 22, 2016 - 01:42

Volkswagen says it will need to conquer the Americas, the region at the centre of its emissions scandal, to deliver a turnaround at its core VW brand. As Sonia Legg reports, Europe's largest carmaker is also planning to launch a series of higher-margin SUVs, limousines and electric cars to try to win back customers in markets where it has long lagged competitors.

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America has punished Volkswagen more than most. The carmaker's paying the U.S. $14.7 billion for the emissions scandal. But it's still putting the States at the heart of its recovery plan. (SOUNDBITE) (German) VOLKSWAGEN'S BRAND CHIEF HERBERT DIESS, SAYING: "In North America we want to write a come-back story! Volkswagen has to switch from being a niche supplier to becoming a relevant, profitable mass-producer. The U.S. is not just a large car market it is a very profitable one." But VW's brand chief accepts it'll take a decade to catch up rivals there. And globally there's still much work to do. (SOUNDBITE) (German) VOLKSWAGEN'S BRAND CHIEF HERBERT DIESS, SAYING: "The image of our brand has suffered through the Diesel crisis. Many people don't trust us the way they used to." The goal at VW's core brand is to lift the operating profit margin to 6 per cent by 2025, it's currently 2 percent. Job cuts announced last week are key. (SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING: "It employs 610,000 people globally is now cut 30,000 jobs so a little over 5 percent of the total workforce. I think that's the trend of the future unfortunately. It's very interesting that the German unions played ball and I think they are being very realistic. The company could have suffered a good deal more from the emissions scandal." VW's certainly keen to show it's changing. It plans to have 19 SUV models by 2020 and be selling a million electric vehicles by 2025. They'll also be a budget car for China and India. (SOUNDBITE) (German) VOLKSWAGEN'S BRAND CHIEF HERBERT DIESS, SAYING: "The new look will also have substance. It will be more approachable, more user-friendly. Arrogance will be a thing of the past!"" Driving that message home won't be easy when numerous legal cases are yet to be resolved.

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VW puts Americas at heart of turnaround plan

Tuesday, November 22, 2016 - 01:42