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Volkswagen's Americas-Built SUV Offensive And Product Launch Plans 2017-2023

Jul. 04, 2017 11:37 PM ETVolkswagen AG (VWAGY), VLKAF, VLKPFF, GM, TM, TSLA, HMC, NSANY2 Comments
Anton Wahlman profile picture
Anton Wahlman


  • Volkswagen goes America: Two new VW SUVs now made on this side of the Atlantic, including one in Tennessee.
  • In the month of June, the U.S.-made VW Atlas SUV (large 3-row) constituted almost 10% of the company's U.S. unit sales in its first full month of availability.
  • Its U.S. sales are up 8.2% year to date and 15% in June alone. This points to 350,000 U.S. sales in all of 2017, and with a richer SUV mix.
  • To illustrate how Volkswagen is now leaving some other automakers in the dust, consider that Tesla will sell barely more than 100,000 cars worldwide in 2017.
  • This article also details the company's product launch schedule between now and 2023, including the several next all-electric cars.

This week of July 4, Independence Day, we take a look at an example of how one automaker is becoming more American, as measured by final assembly production. It's a story of bringing production from Europe to the American continent in general, and in part to the U.S. specifically.

Less than a year ago, the Volkswagen (VLKAY, OTCPK:VLKAF, VLKPY) brand sold only two SUV models in the U.S. market: Touareg and Tiguan. These two SUVs captured relatively small market share in the U.S., with lower sales than almost all of Volkswagen's competitors.

Both the Tiguan (starting price approx $25,000) and the Touareg (starting price around $50,000) are made in Europe. Around early to mid-2017, this situation changed.

First, the Atlas.

VW Atlas is Volkswagen's large 3-row SUV, competing with segment volume leaders such as the Ford (F) Explorer, Honda (HMC) Pilot, Nissan (OTCPK:NSANY) Pathfinder, Toyota (TM) Highlander and Chevrolet (GM) Traverse with a towing rating of approximately 4,000-6,000 lbs. The VW Atlas went on sale in May 2017. In June, it constituted almost 10% of the company's U.S. unit sales.

The VW Atlas is not made in Europe. It is made in Tennessee, alongside the VW Passat in Volkswagen's Chattanooga factory. The capacity is in place to produce at least approximately 100,000 of these large Atlas SUVs per year, assuming there is demand. Production and sales are likely to be a bit less than that during the Atlas's first year of production, 2017. And yes, the VW Atlas will be exported from the U.S. to other countries, although not to Western Europe.

Second, the (new) Tiguan.

This gets a little confusing, because Volkswagen will continue to sell the existing Europe-built Tiguan in the U.S. for some unannounced amount of time - perhaps a few months, perhaps a few years.

However, most

This article was written by

Anton Wahlman profile picture
I am a former sell-side analyst -- UBS 1996-2002, Needham 2002-2006 and ThinkEquity 2006-2008. These days I review automobiles and other technology products, as well as analyze the automotive and technology industries, and coming up with long/short ideas. I also continue to write (less frequently) on macroeconomics and politics.

Analyst’s Disclosure: I am/we are long F. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

At the time of submitting this article for publication, the author was long GM, F and GOOGL. However, positions can change at any time. The author regularly attends press conferences, new vehicle launches and equivalent, hosted by most major automakers. Volkswagen hosted a product launch event.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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