VW of America: Actually, Maybe This Won't Be the Year We Turn a Profit

Steph Willems
by Steph Willems
vw of america actually maybe this em wont em be the year we turn a profit

Hey, things crop up. Little things, like a global pandemic that ground the economy (and vehicle production, and sales) to a halt for two months, can just appear out of the blue and wreak all sorts of havoc.

Because of just such an occurrence, Volkswagen of America’s long-awaited return to black ink will have to wait.

Ever higher sales and market share figures were once the primary goal of automakers operating in the U.S. That changed to profitability in recent years, with VW being the first to rank fiscal sustainability over sales targets — the result of the automaker’s diesel emissions scandal and its resulting financial fallout.

Per Automotive News, VW’s chief financial officer, Frank Witter, told media on Thursday that 2020 will become another year of economic recovery for the brand’s U.S. region.

“We were well on our way to reaching our target of a breakeven for the VW passenger car brand in the USA in 2020,” Witter said. “Due to the coronavirus, it naturally won’t be possible to meet this now, unfortunately. It’s a setback, but it doesn’t change our basic aspiration.”

A return to profitability in the U.S. was one of VW’s key goals when it laid out its economic recovery plan in 2016. Until now, things have progressed swimmingly, with the Atlas and current-generation Tiguan proving solid sellers. Last fall, VW’s Chattanooga, TN assembly plant began building the slightly shortened Atlas Cross Sport alongside the refreshed 2021 Atlas.

Last year showed the brand’s upward sales momentum continuing apace, with volume up 2.6 percent. That momentum hit a brick wall in March, however, as the pandemic’s arrival saw sales plunge 42 percent in that month. The sales loss more than offset the continued year-over-year gains seen in the first two months of the year, setting the brand up for a 13 percent quarterly sales loss.

At least VW has product buyers apparently want, allowing it to potentially bounce back quickly once things return to near-normal.

[Image: Volkswagen]

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2 of 10 comments
  • John R John R on May 08, 2020

    I just priced out a Model Y for $55,990. Before tax incentives. -white exterior -white interior -20" wheels There will be bloo...er...incentives on this.

  • Mike-NB2 Mike-NB2 on May 10, 2020

    That photo from VW is a bit misleading. The Atlas can tow 5000lbs and that Airstream in the background outweighs that by a sizable amount.