FRANKFURT — Volkswagen of America Inc. wants to increase group sales to 1 million units by 2018 and focus the VW brand on four core vehicles.

VW sales would more than triple to 800,000, from 2006's sales of 235,140. Audi sales would more than double to 200,000, from 90,116 last year.

The strategy means a major shift for VW. Its lineup will be priced about 5 percent above its U.S. and Japanese competition, rather than the current 10 percent. But it will try to be a premium brand, attempting to compete against Mercedes-Benz and BMW with a similar vehicle range.

Out of many, four

Rather than depend on many — and sometimes not very successful — niche vehicles, VW will concentrate on four designed and targeted for the United States, says Stefan Jacoby. He is the new CEO of Volkswagen of America Inc., the holding company for the VW, Audi and Bentley brands in the United States.

The core vehicles will include two volume sedans, the small Tiguan SUV that goes on sale in the United States next year and a mid-sized SUV, he says. The four will account for between 500,000 to 600,000 units a year.

The volume cars will replace the Jetta and the Passat. But they will be better positioned in size against competitors such as the Honda Civic and Accord, rather than straddling two segments as today's VWs do, Jacoby said last week at the Frankfurt auto show.

VW also is considering a plant in the United States because production at the Puebla, Mexico, factory is nearing capacity, he says. The plant decision will be made “in the long term,” says Jacoby.

He says the new strategy is to break even in 2009 and move into the black in 2010.

The Volkswagen Group lost 607 million euros, or $843.9 million at current exchange rates, in North America last year.

VW has pushed too hard into niches, says Jacoby. “We need to come back to our original roots as the "people's car' and "driver's wanted.' I don't want to bring back those campaigns or tag lines, but we have to re-evaluate our position.”

Having the right vehicles for the United States does not mean trimming content, Jacoby insists. “We have good products.”

But “from an engineering point of view, they do not fit the market,” he admits. “They are overengineered and made for high-speed performance for the European driving environment.”

The excitement of the VW brand will come from niche vehicles like the Rabbit, Golf GTI and a Passat coupe due next year, he says.

More diesels

VW also will reconsider engines and transmissions for the United States with an eye to increasing diesel sales when a 50-state diesel goes on sale in the Jetta sedan and Touareg SUV next year.

VW AG CEO Martin Winterkorn said last week that VW is considering a pickup. But Jacoby says that vehicle would be primarily for the Middle East and emerging markets.

“It may be for the U.S., but it is not a focus,” he says. “We will not burn our feet in that segment. It is not where we belong.” 

You may e-mail Diana T. Kurylko at dkurylko@crain.com