SAN FRANCISCO -- After two years of declining U.S. sales for Volkswagen, brand executives meeting with dealers at the NADA convention reaffirmed the company's goal of selling 800,000 vehicles a year in the U.S.
But they said hitting the target by 2018 -- the brand's longtime goal -- is less important than improving dealership profitability in the short term.
"It's still on. They just softened the date," Mike Sullivan, a Los Angeles-area VW dealer, said of VW's 800,000-vehicle U.S. sales goal. "The point is if you get some of that logical, steady growth, it will develop. It doesn't matter if it's in '17, '18 or '19. The point is growth and profits."
Dealers welcomed the profit-focused message after the make meeting; some 25 to 30 percent of VW retailers struggle to remain in the black month to month. VW forecasts a small uptick in U.S. sales this year as dealers await the early 2017 arrival of two North America-built crossovers and the promise of larger sales growth to follow.
To help sales this year, a new trim level of the Passat, with more content than the Passat SE that costs around $2,000 less, arrives in the first quarter ahead of the freshened Passat due this year, according to Matt Welch, general manager of Auburn Volkswagen near Seattle. The new Golf SportWagen arriving this spring will also help boost volume, he said.
Last month at the Detroit auto show, Volkswagen Group of America CEO Michael Horn said the company planned to add 100 dealerships in the U.S. by the end of 2018. The plan sparked concerns with some dealers worried that the new stores would undercut their sales, a concern that Horn addressed early in the make meeting, dealers said.
Horn stressed that new dealerships will be in markets without VW stores, meaning existing dealers won't get new competitors nearby.
More than 40 of the 100 additional stores were approved under an earlier plan that sought to add 200 U.S. dealerships. Horn scrapped that plan shortly after being named CEO, yet the factory can't unwind the roughly 40 commitments already made, Welch said. He said the remaining 60-odd new dealerships won't open until after the new crossovers arrive in 2017 and sales increase.