'Good Times' Return for Volkswagen Around 2020, Diess Predicts

Steph Willems
by Steph Willems
good times return for volkswagen around 2020 diess predicts

After the awkward auto show apologies of the past year, Volkswagen executives are looking forward to a rosy time in the near future after the brand stabilizes itself.

Those “good times” will return, according to global brand chief Herbert Diess, but not before three to four years of rough slogging. In a Bloomberg TV interview from the Paris Auto Show, Diess mulled adding new models to its U.S. lineup.

The executive predicts that Volkswagen should be “finished the hard work” of restructuring its operations by 2020.

That task includes bringing employee compensation and pensions under control, settling all fines, lawsuits, recalls and buybacks spawned by the diesel emissions scandal, rolling out a crop of electric vehicles and boosting production of profitable models, especially in the U.S. The automaker might also position its foray into mobility services like ride-hailing and self-driving shuttles into a new brand.

Easy peasy.

Volkswagen introduced its I.D. concept at the Paris show, promising a long-range electric compact by 2020. The vehicle offers up to 373 miles of range and would slot alongside the gas-powered Golf in the brand’s lineup.

Though the brand touts electrics as the future of driving, the transition away from fossil fuels puts the company in a fair bit of financial peril. According to Bloomberg, the company’s operating margin sits at a very low 1.7 percent. The switch-over to EVs would eat up cash through costly retooling and training, potentially lowering profit margins.

Potentially offsetting that, the automaker is considering bringing new models to the U.S. to bolster its recovery plan. While the Teramont midsize SUV and lengthened Tiguan bow next year, it might not be enough. Automotive News reports that the company will decide whether to add new U.S. models (likely crossovers or SUVs) by early next year.

[Image: Volkswagen of America]

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  • Stuki Stuki on Sep 30, 2016

    Good things will continue to happen in the future, and only in the future, for as long as selling elevator pitches to dunces and hypesters with free access to unlimited funds, remain more important to ones share price, than bothering to build decent product for decent prices. As opposed to the former, the latter is actually hard.

  • HotPotato HotPotato on Oct 04, 2016

    So does this squelch or fan speculation that VW is bringing Skoda to the US? :-) You could describe a Skoda as a VW but bigger, cheaper, and not quite as nice. You could describe the cost-cut, US-market Jetta and Passat the very same way. I wandered through my local VW dealer the other day and there was a Jetta, a Passat, and a Golf parked next to each other...and all three were priced almost identically!

  • Abrar Very easy and understanding explanation about brake paint
  • MaintenanceCosts We need cheaper batteries. This is a difficult proposition at $50k base/$60k as tested but would be pretty compelling at $40k base/$50k as tested.
  • Scott ?Wonder what Toyota will be using when they enter the market?
  • Fred The bigger issue is what happens to the other systems as demand dwindles? Will thet convert or will they just just shut down?
  • Roger hopkins Why do they all have to be 4 door??? Why not a "cab & a half" and a bit longer box. This is just another station wagon of the 21st century. Maybe they should put fake woodgrain on the side lol...