Americans may associate VW with very distinctive small car models, but that may change if the third-largest vehicle producer in the world has its way. An article in Bloomberg says that Volkswagen AG plans to invest $7 billion to develop products that will help the company claim more U.S. sales and become more of a mainstream car brand in North America.
A significant share of this investment will go towards the development of a midsize SUV, or sport utility vehicle, that is aimed at U.S. consumers.
Why Does VW Hope a Midsize SUV Will Help U.S. Sales?
According to data from the Wall Street Journal, or WSJ, the market for midsized SUVs has increased by over 9 percent in the US between April of 2014 and April of 2013.
According to this data, the market for medium-sized SUVs is not the fastest growing vehicle segment. The demand for both small and large SUVs has actually increased by over 20 percent.
But even though the demand for midsized SUVs has not increased the most in the U.S. auto market, there is still a much greater demand for this size of sport utility vehicle. For example, the WSJ reports sales of almost 70,000 midsized SUVs in April of 2014. Compare that with sales of about 20,000 small SUVs and about 26,000 large SUVs.
The potential for growth may be somewhat smaller in the medium-sized SUV market, but there is still a larger potential to make more sales with a bigger market. Meanwhile, the demand for small to medium cars has actually declined in this same time period, and that is the type of vehicle that many American car buyers associate with VW.
The Bloomberg article says that the new VW SUV is currently called the Crossblue. Right now, the company already has a compact SUV. They also sell a midsized SUV, but it carries a premium price tag that is higher than Toyota’s Lexus RX.
According to the Wall Street Journal, the demand for luxury SUV vehicles has increased by only about five percent in the last year. The Crossblue is being positioned to compete with more modest vehicles like Ford’s Explorer and Toyota’s Highlander.
When Can You Expect to Find a Crossblue at Your Local Dealer?
Car and Driver Magazine got confirmation from VW CEO Marvin Winterkorn that the vehicle would begin entering auto dealer lots in the U.S. by 2016.
Right now, the company plans to produce these SUVs at the VW plant in Chattanooga, Tennessee. Even though demonstration models have been seen and even test driven, production plans are not totally finalized and confirmed. Also, Crossblue may have a hybrid version.
Will the New VW Midsize SUV Help U.S. Auto Sales?
Car and Driver Magazine reported that Ford sold almost 200,000 Explorers in 2013. Ford is the midsize SUV sales leader in the American market. VW suffered from sagging U.S. sales during this same time period, so they may want to capture some of their biggest rival’s share.
The Car and Driver Magazine article speculated that VW could claim a victory if they can sell even 25 percent of the number of Crossblues as Ford sells Explorers. A roomy interior, high-tech features, and an efficient engine may appeal to many American consumers.