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Sunday, July 22, 2007

VW USA SALES FALL SHORT OF EXPECTATION AND PULL OUT IS BEING CONSIDERED.


Volkswagen’s troubles as of late have been well-publicized, with its U.S. operations hemorrhaging nearly $1 billion over each of the past three years.

The situation is rather grim—so much so, in fact, that BusinessWeek says many conversations among executives are now suggesting that the company may not keep its operations in the U.S. According to the article, a source close to the automaker says: “For the first time in some time, the phrase ‘If we are to stay in the U.S.’ precedes a lot of conversations at VW.”

That scary bit of context comes amidst a turnaround plan that BW is characterizing as a “last-ditch drive” to return Wolfsburg’s U.S. operations to profitability. Recent high-profile advertising campaigns have largely failed to ignite sales of the company’s key Passat and Jetta models, and VW has suffered widespread and severe quality issues in recent years, which have garnered them low marks on a number of key industry customer satisfaction metrics. Officials will likely have to right these two areas if it has any hope of finding its way into the black in the U.S.

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