Volkswagen of America
From Wikipedia, the free encyclopedia
Volkswagen of America (VWoA) is the U.S. subsidiary of the Volkswagen automobile company in Germany. Formed in April 1955 in Englewood Cliffs, New Jersey to standardize dealership service in the United States, it grew to 909 Volkswagen dealers in the United States by 1965 under the leadership of Dr. Carl Hahn. Under him and his successor as president of Volkswagen of America, J. Stuart Perkins, VW's U.S. sales grew to 569,696 cars in 1970, an all-time peak, when Volkswagen captured 7 percent of the U.S. car market and had over a thousand U.S. dealerships. The Volkswagen Beetle was the company's best seller in the United States by a wide margin.
From then on, however, intense competition from American and Japanese automakers caused VW sales in America to fall as much as 87 percent between 1970 and 1992, despite the introduction of new front-drive models in 1975 to replace the Beetle and its rear-engined, air-cooled stablemates. As a result, the number of dealerships in the U.S. was also reduced to 630 by the mid-1990's.
An attempt to build Volkswagens in America with a factory in Pennsylvania that opened in 1978 , the first such venture by any foreign automaker, lasted only ten years. A great upheaval occurred in the early eighties as the manufacturing division and the sales division were merged and Volkswagen of America moved to Troy, Michigan as a result, finally settling in Auburn Hills, Michigan in 1991.
Volkswagen of America's sales hit rock bottom in 1993, with fewer than 50,000 cars sold that year, and many observers expected VW to quit the United States. Sales began to recover the following year, however, and by the end of the decade, thanks to effective advertising and the launch of more competitive new products, including the New Beetle in 1998, the VW brand was back on firmer ground. Volkswagen of America went on to sell 355,648 cars in 2001, its best year since 1973.
In the 2000's sales have tapered off somewhat due to competition, quality issues and delays in product introductions, and VW's U.S. sales for 2005 totalled 224,195 - a reduction of about 37 percent from four years earlier. New models for the 2006 and 2007 model years have resulted in a sales growth of 11.8% year-over-year in the first three quarters of 2006, and indicate the likelihood of steady sales in the future.
A new advertising agency, Crispin Porter + Bogusky, is expected to help rejuvenate VW's presence in the U.S. as well. Its ads for the fifth-generation Volkswagen GTI have sparked interest in the brand not seen since the launch of the New Beetle, and ads for the fifth-generation Golf/Rabbit hatchback have translated into initial strong sales for that model.
