NEW DIRECTION FOR VW AMERICA

The announcement of Jonathan Browning as new CEO of Volkswagen of America strikes us as a perfect balance between reigniting passionate stewardship of the proud brand and establishing a level of business experience and honesty necessary to rebound from years of losses. Browning’s resume notes stops at Ford and GM, and therefore he should be well-placed to understand and appreciate the specifics of the U.S. market. In order for VW of America to succeed to the level required by its parent company, they must step away from previous positioning as ‘almost as good as a BMW’ and reset their brand image as ‘better than a Honda or Ford...with European style included free of charge.’ Early reports and reviews of the 2011 Jetta are tepid at best, so Browning needs to take advantage of its price improvement compared to the previous model as a way to lure wary or bored Asian-import buyers. Volkswagen of America’s best short-term challenge should be to convince Toyota shoppers that they deserve more style and presence than the terminally bland Corolla. VW also can ride the waves created by GM as they introduce the Chevrolet Cruze and move toward the goal of disrupting Asian-import owner perceptions and misconceptions. Volkswagen is in a curious position on a global scale, as they are experiencing strong growth in many markets, but have not recaptured the magic they once held as America’s top import brand. In order for Volkswagen AG to make good on their stated goal of passing Toyota as the world’s No. 1 automaker by 2018, VW of America must engineer unexpected levels of success in the United States. It is a daunting challenge, but Browning and his U.S. team have the financial support of the parent company and a new factory in Tennessee to build products designed with fickle U.S. consumer tastes and complexities in mind. James Bell, Executive Market Analyst, Kelley Blue Book