Volkswagen Puts U.S. Plans Into Overdrive The newly designed Volkswagen Beetle is the darling of this week's New York International Auto Show. The sleek, more masculine Beetle is not just a new version of an old car; it's part of a new strategy.
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Volkswagen Puts U.S. Plans Into Overdrive

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Volkswagen Puts U.S. Plans Into Overdrive

Volkswagen Puts U.S. Plans Into Overdrive

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The darling of this week's New York International Auto Show seems to be a newly redesigned Volkswagen Beetle. Sleek, more masculine if you please. It's not a version of an old classic car, it's part of new strategy by Volkswagen.

NPR's Sonari Glinton reports from the New York Auto Show.

SONARI GLINTON: The German-based Volkswagen has a long history in the U.S. market - 55 years to be exact. Most of us have a connection to it, you know, Walt Disney and Herbie.

(Soundbite of Movie "The Love Bug")

NARRATOR: It's the story of Herbie, the screen's first four-cylinder star.

GLINTON: It's been a long time since Herbie the lovebug drove his way into the hearts of Americans. It wasn't just the Beetle, remember the microbus? Farfegnugen, anyone? Anyway, there were a lot of cars, but also a lot of problems.

Mr. JOHN BROWNING (CEO, Volkswagen Group of America): The Volkswagen brand went through a period where perhaps you could say it lost its way a little in the U.S. market base.

GLINTON: John Browning is the CEO of the Volkswagen Group of America. Browning is eluding to problems with quality, reliability, marketing and image. Volkswagen can turn the love for Herbie into a dominance of the U.S. market, because Browning says the company hasn't always gotten the American consumer. He says now that's going to change.

Mr. BROWNING: We're really focusing on the U.S. market as an integral part of our global strategy. Now, to achieve that we need to really step up our game in the U.S. market.

GLINTON: Browning says part of stepping up their game means spending money in the U.S., and a lot of it.

Mr. BROWNING: We're making the investment in production, we're making an investment in the products for the U.S. consumer, importantly, investment that was made in the U.S. market even through the depths of the recession.

GLINTON: VW spent more than $5 billion on the new car plant in Chattanooga, Tennessee. The first car, a Passat, rolled off the line this week. That investment in the U.S. is important if Volkswagen wants to be the number one car company in the world.

Ms. REBECCA LINDLAND (Senior Auto Analyst, Global Insight): Americans don't realize just how enormous this company is.

GLINTON: Rebecca Lindland is an auto analyst.

Ms. LINDLAND: They are so enormous in all the other parts of the world. They're the biggest seller in China. They sell eight - I mean, their factory in Wolfsburg produces 800,000 vehicles a year - one factory.

GLINTON: Lindland says to win the global race with Toyota and GM, Volkswagen has to sell a lot more cars in the U.S. Jessica Caldwell is with the car website She says the company has had some success, especially on the coasts and with young people.

Ms. JESSICA CALDWELL (Senior Analyst, They're definitely targeted at a younger demographic, and I think it serves them well with that demographic, but definitely as their designs have matured, you can say that it's alienated some of those people. So it's not quite quirky enough to work for everyone. It's not quite mainstream enough to work for everyone, so it's kind of a, you know, somewhere in between.

GLINTON: That quirky in between means the company has a hard time getting one of those huge blockbuster cars. Caldwell says the American car market has become more competitive with more global players making serious investments.

Ms. CALDWELL: Well, it's harder to break through and become that one big car like the Ford F-150 or Toyota Camry. I mean, it's more difficult today than it ever has been.

GLINTON: That competitive landscape means Volkswagen will have a harder time reaching its goal of selling a million cars a year in the U.S. in the coming decade. Caldwell says she's skeptical that VW will meet its lofty goal.

Ms. CALDWELL: It comes down to good product, and if you have good products, people will come and they'll buy your brand, but it's something that's gonna take a long time. It just - it can't happen in a few years. You can't grow your sales by 400 percent in five years' time.

GLINTON: VW executives say with higher gas prices and their smaller, cooler cars, they hope the new Herbie will be as loved as say a Toyota Camry.

Sonari Glinton, NPR News, New York.

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