MenuMENU
SearchSEARCH

VW Dealers To Get More Crossovers Because of Ukraine Conflict

Volkswagen Group will shift production to China and North America after wire harness and other material shortages from Russia's invasion of Ukraine impact European production.

March 17, 2022
VW Dealers To Get More Crossovers Because of Ukraine Conflict

 

Credit:

Volkswagen

2 min to read


 

The Ukraine-Russia conflict will put more new crossovers on the lots of U.S. Volkswagen dealerships in upcoming months.

CEO Herbert Diess told reporters at a press conference that the German automaker would shift more production to North America and China, at least temporarily, as a result of the war.

The move is expected to increase output from VW-brand plants in Chattanooga and Puebla, Mexico, as well as the Audi plant in San Jose Chiapa, Mexico, all of which assemble crossovers mostly sold in the U.S. Chattanooga produces the VW Atlas and Atlas Cross Sport and builds non-saleable pilot versions of the ID4 battery-electric crossover. Puebla assembles the VW Tiguan and Taos. The Audi plant produces the popular Q5.

VW’s China plants will also benefit, as microchips destined for use in Europe are reallocated to China and North America.

The most significant supply chain constraint at the moment are wire harnesses produced in Ukraine, Diess said. If VW cannot reallocated production (from Germany to other plants) in three to four weeks, the automaker’s outlook will need revision, Diess said.

Diess also warns semiconductor shortages, supply bottlenecks, high commodity prices and the Russia-Ukraine conflict will trim growth in 2022 as challenges mount against the auto industry.

VW brand sold 375,030 vehicles in the U.S. in 2021, up 15% from 2020. About 73% of these sales were crossovers. The automaker captures 2.5% of U.S. auto sales and when sales from other group brands, Audi, Porsche, Bentley and Lamborghini, are included its market share jumps to 10%.

Tom McMenamin, chairman of the VW National Dealer Advisory Council, confirmed dealers will see more North American-built vehicles heading to their lots in 2022. He speculated that getting more crossovers from Chattanooga and Puebla for VW's 638 U.S. dealerships will allow the brand to gain U.S. market share as other automakers struggle with their own supply constraints

More Dealer Ops

F&Iby StaffApril 2, 2025

DOWC Powers the Future of F&I for NESNA

Company is providing a fully integrated F&I administration model to Nissan Extended Services North America’s dealer network.

Read More →
IndustryNovember 27, 2024

Six Powerful Questions

Take the time to answer these and lay the groundwork for a successful year-end.

Read More →
Dealer Opsby Hannah MitchellSeptember 19, 2024

Sunny Side Up

Many dealers are going green – both environmentally and cash-wise – by powering their stores with solar-generated electricity.

Read More →
Ad Loading...
IndustryAugust 26, 2024

Is It Time to Rethink Business Development Centers?

Their role at automotive dealerships is essential today to give salespeople time to close deals.

Read More →
Product & Technologyby Hannah MitchellAugust 22, 2024

A Backup Plan

DMS outage revealed a gap that dealers may want to fill.

Read More →
Dealer OpsAugust 20, 2024

Maximizing Revenue Potential

The strategic imperative for auto dealers is to prioritize F&I product sales and wealth-building in challenging times.

Read More →
Ad Loading...
IndustryAugust 7, 2024

How to Optimize Liquidity in a Fluid Environment

It's wise to not take your dealership's banking relationships for granted.

Read More →
IndustryJuly 29, 2024

Unlocking the Keys to Success

Why customer retention matters now more than ever

Read More →
Dealer Opsby StaffJuly 23, 2024

Store Names First Female Dealer Principal

Howard Bentley Buick GMC is now headed by Taylor Bentley Conner.

Read More →
Ad Loading...
IndustryJuly 18, 2024

Masters in Training

Rick McCormick preaches the wisdom of breaking into what he considers the top 3% of F&I managers with a stance of continuous development.

Read More →