phaeton

By Chad Thomas

Jan. 7 (Bloomberg) -- Volkswagen AG, unprofitable in the U.S. since 2002, plans to more than double sales in the world's largest carmaker in five years, with the introduction of new models including a compact sport-utility vehicle.

``We want to reach unit sales of around 500,000 to 550,000,'' Adrian Hallmark, the Volkswagen brand's U.S. chief, said in an interview today at the North American Auto Show in Detroit. ``Within three to five years, we should be in that range.''

Hallmark also said Wolfsburg, Germany-based Volkswagen cut its U.S. loss last year ``by more than 11 percent'' as he reduced incentives on average by ``about 10 percent.'' The carmaker in 2005 reduced the U.S. loss 6.5 percent to 843 million euros ($1.1 billion) from 902 million euros in 2004.

Volkswagen's U.S. sales last year rose 4.9 percent to 235,140 vehicles. The company, Europe's largest carmaker, had record U.S. sales in 1970 of 569,696 cars and vans. Wolfgang Bernhard, who took over the brand in May 2005, plans to bring 20 new vehicles to market in the next four years.

``Is it conceivable? Yes,'' Rebecca Lindland, a forecaster for Lexington, Massachusetts-based Global Insight Inc., said of the sales target. ``But is it truly attainable? It's going to require divine intervention.''
The first of the new models will arrive in showrooms in 2008, including a compact sport-utility vehicle called the Tiguan and a minivan for the U.S. built with DaimlerChrysler AG.

U.S. Forecast

Hallmark said he expects U.S. sales to be ``flat'' this year. He added that the financial performance will improve in 2007, and that he expects to break even in the U.S. in 2009 at the latest.

Volkswagen also said group sales gained 9.3 percent to a record 5.73 million vehicles worldwide last year on growth in western Europe. The namesake Volkswagen brand's sales increased 10 percent worldwide to 3.39 million vehicles.

``We already made significant progress in customer satisfaction last year with improved vehicle quality and innovative service concepts,'' Bernhard said in a statement today. Volkswagen will be ``continuing along this path with uncompromising determination'' in 2007.

The company's Audi luxury division posted its 13th straight year of record sales, gaining 9.2 percent to 905,000 cars. Audi will also report record revenue and profit for 2006, Rupert Stadler, Audi's new chief executive officer, told reporters at the show.

Clean Diesel

Stadler, who took over Jan. 1, presented a Q7 sport-utility with clean diesel technology that he said will come to market next year. The vehicle will be marketed under DaimlerChrysler's Bluetec label, part of a cooperation between Audi, Volkswagen and DaimlerChrysler to promote diesels in the U.S.

``I can also announce today that we will launch further Audi Bluetec models in the U.S. in the future,'' Stadler said, flanked by the singer Seal, who performed at Audi's press conference. ``As far as I am concerned, there is no limit regarding the mix of Audi Bluetec in the U.S.''

Audi helped last year in reducing Volkswagen's U.S. loss, posting its first profit in the world's largest automobile market after four years of losses.

``Mission accomplished,'' Johan de Nysschen, Audi's U.S. chief, said today in a separate interview at the show. ``We posted a modest profit.''
De Nysschen, who is targeting eventual U.S. sales of 120,000 vehicles, said he expects to ``continue growing'' in the U.S. this year. Audi sold a record 90,116 vehicles in the U.S. in 2006.

No SEAT Sale

Stadler said Audi has no intention of selling the carmaker's financially struggling Spanish Seat unit, which lost 62 million euros in 2005.

Stadler, who became Audi's chief financial officer in 2003, said he was not planning any significant shifts in strategy at Audi under his leadership. ``There will be no change of direction because no change is needed,'' he said.

Stadler said he expects 2007 sales to grow, declining to be more specific. He reiterated a goal of reaching 1 million in sales in 2008.

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Yannis

Good luck to them. I hope the diesel offensive works.

phaeton

Agreed but they need to fix the Dealership service 1st

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