VW Will Need More Dealers - In Four Years

Volkswagen of America will need to expand its dealer network after 2014, said Jonathan Browning, Volkswagen Group of America's CEO.

The extra dealers will be needed to achieve VW's goal to sell 800,000 units annually in the United States by 2018, Automotive News reported.

VW, which is on track to sell about 250,000 units this year, expects to reach 450,000 to 500,000 in the next five years with the introduction of a new mid-sized sedan and a redesigned Beetle next year. Browning said the current 582 dealers can handle that much extra volume.

But to reach the 800,000 target, he said, “we need to expand the footprint.”

Browning said VW has not set its long-term goal for the number of dealers it needs, but said many of them have “invested and are committed to growing.”

Browning said the new mid-sized sedan, to be built at VW's new plant in Chattanooga, Tenn., will debut at the Detroit auto show in January and go on sale in the third-quarter of 2011.

Meanwhile, VW sales are being driven by the new-generation Jetta sedan that went on sale in September. VW slashed the entry-price of the Jetta by $1,700 to $15,999, not including shipping.

“We are extending the price band so we can reach out for new customers,” Browning said. “The new price point signals that VW is in reach and, with free maintenance, that ownership is cost-efficient.”

Early data show that 60 percent of Jetta buyers are conquests, on par with VW's goals, Browning said.

To handle a growing number of trade-ins, VW is expanding its certified used-vehicle program and will tie part of its variable margin to used-car sales effective Jan. 1.

Browning said VW wants to involve more dealers in the program. Currently, about 500 are active.