The 5 Percent Solution: Volkswagen's Not Giving up on Its U.S. Market Share Dream

Volkswagen doesn’t make much of a fuss about becoming the world’s largest automaker these days, mainly because it’s already cleared that hurdle — and in the wake of the diesel emissions scandal, no less. In the United States, however, one long-helg goal remains elusive: reaching a 5 percent market share.

While the automaker claims its top priority is shoring up its U.S. business with new, Americanized product, old dreams die hard. VW still wants the kind of market share it enjoyed in 1970, but it’s not even halfway to reaching that goal.

Volkswagen brand chief Herbert Diess told journalists at VW’s Wolfsburg, Germany HQ Wednesday that the automaker “intends to become a leading volume provider and aim for around 5 percent market share” in the U.S., Automotive News reports.

It’s not the first time Diess laid out the company’s American intentions, but his latest proclamation allows a touch of doubt to creep into the timeline. Last summer, as VW ate up just 1.9 percent of the U.S. market, Diess said, “We can’t win America over in two years time. It’s a 10-year plan.”

Today, with VW market share having passed the 2 percent barrier, the exec remains confident that 5 percent isn’t a pipe dream. “It is possible and we believe we are able to achieve it,” Diess said. “We think we have a very solid product portfolio tailored for the U.S. We have a new marketing team that works hard on the brand experience and the brand. We believe that it’s possible — not in a short while, maybe in a 10-year plan.”

So, we’ve moved from reaching 5 percent by 2027 to “maybe” reaching it by 2028. Hardly a big deal, as sales targets often take a backseat to more pressing issues. VW received a fair bit of criticism for chasing worldwide volume in the lead-up to the emissions scandal instead of keeping an eye on its bottom line (or its ethics).

As AutoPacific analyst Dave Sullivan points out, 5 percent of the U.S. market translates into roughly 800,000 units, which was former VW Group CEO Martin Winterkorn’s target for 2018, way back in 2011. The closest VW has come to reaching that goal in the U.S. was in 2012, when market share briefly poked above 3 percent. Brand sales then fell each consecutive year before rising again in 2017. While new crossovers helped turn the tide (and remain a huge part of the brand’s U.S. strategy), last year’s sales volume represents a 22.7 percent drop from 2012.

If buyers take to electric vehicles, Diess claims VW is in a good position to clean up in that segment. There’s four models arriving between 2020 and 2022. “Customers are willing to switch over to electric vehicles if the price is right,” he said.

February sales in the U.S. rose 6 percent, year over year, while sales over the first two months of 2018 show a 5.6 percent increase over the same period in 2017.

[Image: Volkswagen]