With Atlas, VW seeks redemption with U.S. dealers, consumers

Photo credit: BLOOMBERG

Volkswagen, seeking to recover from diesel emissions violations, is betting that a jumbo-sized crossover will persuade more U.S. consumers to give it another chance -- now that the seven-seater has a name they can pronounce: Atlas.

The name initially proposed by company bosses in Wolfsburg, Germany, -- the Teramont -- had landed with a thud when it was run by U.S. dealers months ago. Customers already had to grapple with two crossovers with unusual names, the Touareg and Tiguan.

“It was back in March when we sat together and we openly discussed with a group of dealers, ‘Do you like that name?”’ Hinrich Woebcken, CEO for the brand’s new North America region, said at an industry conference this week in Los Angeles. “And they all said ‘Ah, frankly …”’

So it became the Atlas, a vehicle that was revealed last month and will be on display at the Los Angeles Auto Show for the next week and a half. The crossover was rolled out Thursday at the show with NBA legend Kareem Abdul-Jabbar riding shotgun and former Los Angeles Lakers teammate James Worthy also on board.

The willingness of VW headquarters to let executives in America make changes based on feedback from dealers represents a profound change, which Woebcken called “exciting.” The company is working to regain the trust of U.S. consumers and regulators after it admitted that 11 million of its diesel cars worldwide illegally evaded emissions tests. VW is rolling out new models as it tries to halt a U.S. sales decline that reached its 12th straight month in October.

‘Rebuilding trust’

Alan Brown, head of VW’s U.S. dealer council, applauded the “unprecedented autonomy” that local executives now have -- and are using well under Woebcken.

“He’s looking for every opportunity to make sure that there is no miscue with the car, and the name was a big part of that,” Brown said Thursday. “This car is about our resurgence in the U.S. -- it’s not about anything else. It’s about getting back on track.”

Woebcken said that “rebuilding trust with our U.S. customers, dealers and employees has been our No. 1 priority this past year, and I’m happy that we are on track to do that.”

The crossover will be made in Chattanooga, Tenn., along with the Passat sedan. It will be the largest vehicle in its class, Woebcken said. And with a slim A-pillar around the windshield, it will have segment-leading visibility, he said.

The company has committed to introducing more electric models in the coming years and aims to sell as many as 3 million by 2025. On Thursday in Los Angeles, it showed a new e-Golf electric car with about 50 percent more range and 90 percent more horsepower.

L.A. Lakers legends James Worthy, second from left, and Kareem Abdul-Jabbar, second from right, joined VW execs on Thursday to showcase just how big the VW Atlas crossover is on the inside at the L.A. auto show. Photo credit: TOM WOROBEC

Wider lineup

VW is introducing crossovers to appeal to American families. The brand will cover two-thirds of the market segments instead of being just a niche player, relevant to only about 40 percent of the nation’s consumers, Woebcken said.

“A college girl loving her Jetta, 10 years later with an active family life, having two, three kids, then left the brand, because we didn’t have anything to offer,” he said. “The Atlas, which we launched today here on the show, is a great answer to this.”

Atlas may help keep VW fans in the fold, but it will be difficult to woo buyers from other brands, said Rebecca Lindland, senior analyst for Kelley Blue Book.

“They may have opportunities to keep existing owners and upgrade them from a Tiguan or a Passat or a Jetta,” she said. “It’s the right product, but it’s just an incredibly competitive segment. ”

VW’s Golf Alltrack, which went on sale in late September, starts the brand’s onslaught with a more rugged, all-wheel-drive version of the small car. The Atlas goes on sale in the spring, then a lengthened, three-row version of the Tiguan arrives in the summer, he said. After the SUV offerings and updating the core of the car lineup, VW plans to emerge as a major force in electric cars around the world, said Juergen Stackmann, head of the company’s global sales and marketing.

The automaker signaled Thursday that it had reached an agreement between management and workers in Germany to cut costs and recast VW along a future built more around electric mobility and services.

Second chances

America is willing to give people and institutions second chances, Woebcken said. After the damage of the diesel scandal, which eliminated a quarter of VW’s U.S. volume, Woebcken said the reorganization of the company and the new emphasis on hybrid and electric models will bring a brighter future.

“In 10 years time,” he said, “looking back, people will say ‘Oh, wow, this was a shake, but it made the company make bold decisions which also brought the company forward in terms of product and success.”’

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