Learn about the Atlas SUV | Dealer.com Editor-in-Chief, Larry Printz, Interviews Volkswagen's CEO

Volkswagen's CEO talks about the company and their new midsize SUV

For decades, many automakers have been marketing midsize crossover utility vehicles in the United States, a class first popularized during the Reagan and (first) Bush administrations by such vehicles as the Jeep Cherokee, Grand Cherokee and Wagoneer, as well as the Ford Explorer.

Having long sneered at Americans' desire for such vehicles, Volkswagen saw its market share slide into insignificance as the competition were only too happy to fill American garages with Explorers, Highlanders, Grand Cherokees, and Pathfinders. In a "Hey McFly, anybody home?" moment, Volkswagen has belatedly realized that they must succumb to the inevitable, and have finally shown a production version of a midsize SUV after years of showing new VW SUV concept vehicles.Dubbed the Volkswagen Atlas, the new 2018 model will launch in spring 2017, and will be assembled at the company's plant in Chattanooga, Tenn.

"We had to get used to the vehicle size that's more appropriate for America," he continued. "The roads are wider, the cities are bigger, and we grew into that. We wanted to give the car a wide appearance, and an earnest look," says Bischoff. "It should look substantial, without looking too aggressive." The Atlas's crisp, conservative look should wear well while affording bountiful interior space. "The car has to grow into time; it should not go out of fashion in two or three years," said Oliver Stefani, the vehicle's exterior designer.

What VW's American CEO had to say At the Atlas's unveiling in Santa Monica last month, Hinrich Woebcken, CEO of VW's North American region, shown at left, spoke about the vehicle. Here's what he had to say:

Q: You said that with the launch of this product, Volkswagen would be competing in 60 percent of the market. Are you happy with 60 percent?
A: "We are looking at all of the segments of course, but right now, we are trying to grow in the strong segments. This is our main focus, and I am optimistic that we have additional opportunities besides this SUV in other products in other segments."

Q: Are you hurt by being so strong in small cars?
A: "Well, this company grew with small cars and that's its heritage with the Beetle and Golf. We've also seen very strong growth in the D-segment with products for America."

Q: What are your sales projections for the U.S.?
A: "I am sure you know that answer. We typically do not share sales projections."

Q: What would are you happy with the figure that you're targeting the first year out?
A: "We aiming to be a significant player in the market."
Q: By conquesting whom? Who has the biggest target on their back?
A: "Well, you know the players in the C and D segments. We definitely believe that this package has great charm to many families to really offer an alternative to others in this segment."

Q: Which is your volume player, the 2.0-liter or the 3.6-liter? Which will sell more?
A: "Typically, this is a six-cylinder market, but we believe that in this four-cylinder turbo, we have a great alternative for people who want something below the six-cylinder, and it's very fuel efficient. That's why we believe that it's a good combination for the market, having a four-cylinder turbo and a six-cylinder naturally aspirated engine."

Q: Doesn't that help with the price as well, coming in lower with the 2.0-liter?
A: "Yes, the 2.0-liter will have a little bit more of a price advantage."

Q: Which one do you believe will sell better?
A: "They're both great. (Laughs) My personal prediction is that the six-cylinder will have a greater portion of buyers than the four-cylinder, at least for the time being. Let's see."

Q: Which products did you benchmark when you were designing the vehicle?
A: "We don't specifically benchmark other products. We look at what the market demands are, what the needs of the families are, and we look at the functionalities and try to incorporate this into our architecture and engineering."

Q: What other models do you expect will be cross-shopped?
A: "Well, this stands on its own."

Q: I understand. But what are people going to be shopping for when they look at this vehicle? Other models, the Explorer, the Pilot? It's almost the exact same size as the Explorer.
A: "Of course we try to be successful in that segment."

Q: But it's almost the exact same size as the Explorer, it's within tenths of an inch. Is that almost pure accident?
A: "No. It's not an accident. We look at the analytics and we look at the market. I think what's very important besides the size is the functionality inside of the car. And if you look at the front pillars, the A-pillars, you know they are manufactured with tailor-made tempered steel so that they are super slim in order to keep them as small as possible, so that the visibility from inside the car and the functionality is much better, even though it possible has the same size as another car. So I think it's very well-engineered so that you can drive a Volkswagen, but have great size inside."

Q: Is this built exclusively for the U.S. market or do you plan to export it from Tennessee?
A: "We are planning to export it from Tennessee, yes."

Q: To what areas?
A: "Well, specifically we have the Arabian countries in mind and also Russia."

Q: What about Europe?
A: "At this time, we don't have plans to export it to Europe."

Q: So the Middle East; what about China?
A: "China will their own midsize SUV as well, but we will not export it there. China will produce it themselves."

Q: Is there's reason that Western European countries aren't being considered?
A: "This car was developed for the American market and we believe that it fits perfectly to the U.S. market, and Europe, there are specifications and other customers demands.so we didn't think about exporting it to Europe. We wanted to concentrate on the North America and Arabian countries."

Q: But it is built upon the MQB platform so in theory it wouldn't be too difficult to export to Europe.
A: "In theory, in theory."

Q: Is there a tariff reason to not ship it to Europe?
A: "No. no tariff reasons. No."

Q: So this is an interesting time; you're in the post-diesel settlement era. How hard is it going to be to develop a strategy for winning these customers back?
A: "First of all, we've got to get a great process done for recalling the car's, fixing them, or giving the customer the option to purchase. You know that just prior or to this, they have approved the settlement, and so we are every happy that we reached a milestone, which carries us forward and leaves this crisis behind us. This product is arriving at exactly the right time. We are starting to get the diesel crisis behind us and are showing to the market to consumers that Volkswagen is back with the right product at the right time for the market."

Q: But as you said, that fix is very important to a lot of customers. The judge gave you a year to do it. Do you think you can do it at all?
A: "Yes we will. We have very good engineers on the solutions. It's a complicated fix because it affects different generation and the final fix is not approved yet by the agency, but the settlement is approved. So we are quite confident that in the next two months we are able to really start the process of getting the things done. And it's not one year, it's basically through the end of 2018."

Q: But it sounds like you're going to be under a lot of pressure to keep these customers in the VW fold.
A: "You can believe me, we have such a professional team working on this whole process, and it will be kind of a German engineered, perfect machine process making the customers happy. You know that the compensation for the damage for the customers is also a very fair one, so we believe that the customers have a very good image of the Volkswagen brand. Of course we hope that most of the customers stay in the brand with Volkswagen."

Q: Well that's important. Do you feel that your brand image came through?
A: "When I talk to customers in the morning before I go to work and coming home from work, I ask, 'why did you buy it? And it's unbelievable; ten out of ten love this car. The customer base is so loyal that I believe, especially in America, they give you a second chance. Then you come up with a good solution, and come up with good new products to show. That's what America is about; these comeback stories. And we are absolutely positive and optimistic that this comeback story will fly with products like this. And I have to continue. Four weeks ago, we announced our Alltrack all-wheel-drive Golf wagon. Three months after this product, we will launch the seven-seat Tiguan long wheelbase, also great for driving right into the heart of the market, the A-Segment SUV. So we now have a cadence coming up. We will definitely convince the audience out there that Volkswagen want to do things right."

Q: How close have you come to building a new Volkswagen bus? You've had seven sweaters, and you've had the Routan. There were a number of concepts that you put out there as recently as just a couple up years ago that looked a lot like the old VW bus. There's been a huge wellspring for it. Did you ever come close to greenlighting a new VW bus?
A: "I personally am highly touched by this product, and of course, I've gotten this question many times. And yes, Volkswagen over the years has had its concept cars to look at who would attract and we continue to do so. But up until now, we've not made a firm decision on when we come back with the bus.

Q: How important would it be to someday get one to market, or has its time passed?
A: "The bus has a great heritage with the brand and has a high value and, of course, on a frequent basis we evaluate with professional assessments. We are testing the market, showing buses on show cars. Stay tuned. I am sure that the show will go on.

Q: You've shown a hybrid version of the show car of this product, the Cross Blue. Are there any plans for hybrids on this platform?
A: "We are looking into this, yes, but we haven't made a final decision yet."

Q: Thank you so much.
A: "Thank you."

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