Crossing Over
To hit its goal of 1 million U.S. sales, VW Group must become a player in the hot crossover market
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- VW plans multibrand product blitz as it pursues sales title
- Mexico-built Q5, U.S. version of Q3 in the works at Audi
- Bentley plans a big crossover
- Bugatti's limited-edition Veyron gets more variants
- Sedan on ice; Lambo SUV looks like a go
- Porsche looks beyond sports cars
- VW: Mid-sized crossover to join U.S. lineup
So how do Volkswagen and Audi figure to hit their much talked-about U.S. volume target of a combined 1 million sales by 2018? One key is a big push into fast-growing crossover segments that the two brands largely have shunned.
Playing catchup, the VW brand has two new crossovers in the pipeline and is contemplating a third, company sources say. Audi will add a compact crossover next year and plans to shift production of the mid-sized Q5 from Europe to a new factory in Mexico when the vehicle is redesigned in 2016.
Sedans have long been the focus of the Europe-oriented VW and Audi product portfolios. But in the next three years the brands will develop more vehicles with U.S. customers in mind.
"It is an important element for VW and Audi to have crossovers to meet the ambitious goals in the U.S market," said TrueCar.com analyst Jesse Toprak. "They have to have some products in every category."
The VW brand aims to reach 800,000 sales by 2018, up from a projected 430,000 in 2012. Audi is targeting 200,000 sales by then, compared with about 135,000 this year.
"We have quite a lot of nameplates in the market today for our total volume," Jonathan Browning, Volkswagen Group of America CEO, said recently. "But we don't have enough depth in key segments."
Sources say VW plans a new seven-seat crossover that would compete with the Ford Explorer and Honda Pilot. The crossover could go on sale as early as 2014 and probably would be built at VW's plant in Chattanooga, which now produces the Passat.
Meanwhile, the replacement for the Tiguan compact crossover, due in 2014, will be substantially larger than the current version, sources say. VW sells fewer than 30,000 units of the current Tiguan, which lacks the legroom and cargo space of such Japanese competitors as the Honda CR-V and Toyota RAV4. The redesigned Tiguan will be "U.S.-sized," according to VW executives.
And VW is considering a small crossover based on the Microbus-inspired Bulli that debuted as a concept at the 2011 Geneva auto show. The concept was similar in size to the Scion xB, but VW likely would make a production version that is big enough to carry five adults comfortably.
The Volkswagen Group lags well behind its major rivals in the crossover category. According to Edmunds.com, crossovers accounted for just more than 7 percent of VW and Audi sales through August of this year, compared with an industry average of 18.7 percent.
Crossovers are equally important to Audi's strategy -- primarily the Q5 that will be built at a new factory in San Jose Chiapa, Mexico, starting in 2016. That plant will have an initial capacity of 150,000 vehicles. This year, Audi only expects to sell about 27,000-28,000 units of its German-built Q5.
Next year or in early 2014 Audi will bring its compact Q3 crossover to the United States to compete with the BMW X1 and Range Rover Evoque. The full-sized Q7 crossover, which shares a platform with the Porsche Cayenne, will be redesigned in 2013.
"For VW and Audi to continue their growth track they need to do well in these crossover segments," said Jeff Schuster head of forecasting for LMC Automotive.
Porsche and two of the VW Group's ultraluxury brands -- Bentley and Lamborghini -- also plan new crossovers aimed at the United States.
Porsche will add the mid-sized Macan crossover in 2014. It will share an architecture with the Q5. The Cayenne, Porsche's first crossover, already accounts for more than 30 percent of Porsche's U.S. sales.
Bentley is also working on a crossover for 2014. Lamborghini ditched plans for a sedan in favor of a vehicle that will be based on the Urus concept crossover due in 2017.
You can reach Diana T. Kurylko at dkurylko@crain.com. -- Follow Diana on 
