2014 DETROIT AUTO SHOW

CEO Horn going 'on offense' to bolster VW's U.S. lineup

Horn: "Difficult year ahead"
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DETROIT -- A nasty case of bronchitis wasn't going to stop Michael Horn from trying to make a strong first impression.

On the eve of the Detroit auto show last week, a large delegation of Volkswagen AG board members and executives had gathered for a company reception at a downtown restaurant. They expected Horn, who until recently was their colleague in Wolfsburg, to make his first appearance as CEO of the company's U.S. division -- and thus become the new face of the Volkswagen brand in America.

Horn had a hacking cough, but he suppressed it enough to introduce Volkswagen AG CEO Martin Winterkorn on stage and speak to the assembled board members.

"My boss is very demanding, and we have a difficult year ahead of us," Horn said. "A challenging year, you would say in the United States. But I have only one mode, and this is to go forward -- or, as you would say, to go on offense."

Horn's offensive already has begun. And it is not just about winning over the U.S. market, where Volkswagen wants to be a major player on a par with Toyota or Honda, and has set a goal of selling 800,000 VW-brand vehicles annually by 2018.

Horn, who had been head of Volkswagen AG's global aftersales operations, also is going on offense in Volkswagen's hometown of Wolfsburg. He is pushing his German bosses to launch products designed specifically for the American market, starting with a U.S.-focused version of the German-made Tiguan compact crossover. The current Tiguan is less popular with American customers than rivals such as the Honda CR-V and Toyota RAV4.

Horn at the wheel
Michael Horn started just this month as CEO of Volkswagen Group of America, but in Detroit he served notice that he is already shaping U.S. product plans.
• Tiguan: Horn said he wants the next iteration of the crossover to be bigger and made in North America.
• Passat BlueMotion: The Golf will be offered with the 1.4-liter turbo engine in the BlueMotion concept shown in Detroit, Horn said; the Passat might be, too.
• Phaeton: The flagship sedan's return to the United States is "clearly planned," he said.
• Amarok: VW's pickup is too small for the United States, Horn said. "If you put this next to an F-150," he said, "I think you can put it in the trunk."

Horn is counting on a background that his predecessor, Briton Jonathan Browning, lacked: a long history working in Germany and a deep understanding of what makes Volkswagen's executives tick.

That includes Winterkorn. A decade ago, when Horn was helping to launch VW's Touareg SUV and Phaeton luxury sedan, he worked closely with Winterkorn, who at the time was Volkswagen's r&d chief.

"I know how the decisions are being made," Horn told reporters last week. "I know how the projects are being calculated. I know about the politics in the system, and what you need to do."

Last week Winterkorn announced that Volkswagen will add a mid-sized SUV in 2016. It will be similar to the CrossBlue concept that the company displayed at the auto show last year.

He did not announce where the SUV will be built.

Last week, citing unnamed sources, Bloomberg and Reuters reported that Volkswagen's plant in Chattanooga is the preferred site, but Michael Macht, board member for production at Volkswagen AG, said the company is still inquiring about subsidies, such as reduced taxes, for investing in each possible location.

"We are just in a period of time where we have to figure out what is the most economic situation," Macht said. "Is it in Mexico? Is it in Chattanooga? So far we have made no decision. We'll do that within the next half year."

You can reach Gabe Nelson at gnelson@crain.com.


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