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New Scout e-brand: VW with a new focus on the United States

Status: 13/05/2022 14:04

Volkswagen could sell many more cars, but the group is being crushed on all sides. That is why the group wants to focus on the US market with a new brand.

The Volkswagen auto group suffered another severe drop in deliveries in April. Wolfsburg delivered only 516,500 vehicles worldwide and thus 37.8% less than in the same month last year. Particularly drastic was the decline in China, by far the most important sales market for the group, where sales fell by half.

On the one hand, the lack of semiconductors still weighs on the group, and also in China the government’s zero Covid policy is slowing down with local lockdowns. But deliveries also dropped dramatically in other major markets. Sales decreased the most in Central and Eastern Europe with a decline of 55.5%, in North America by about a quarter and by almost 29% on the domestic market in Western Europe. After the first four months, the Volkswagen Group was able to deliver 2.41 million cars, trucks and buses to customers, 26% fewer vehicles than the previous year.

All brands affected

With the exception of luxury sports car manufacturer Lamborghini, all brands in the Group have experienced high double-digit sales declines. Passenger cars of the main VW brand fell by 40 percent, at the Czech sister Skoda it was 37 percent less than a year ago, and at the Spanish branch of VW Seat the decline was 32 percent. At Audi, deliveries fell 40 percent, at the sports car branch and Porsche yield pearl, the drop was 16 percent.

In view of the enormous problems of the sector and especially of Volkswagen, observers do not expect a rapid improvement. Experts rather fear that the production of electric cars, in particular, could remain compromised in the long term, as important primary products such as lithium, cobalt and nickel have not only become scarcer due to the war in Ukraine, but have also become considerably more expensive.

Departure from China to the USA

The high dependence on the Chinese market, with over three million vehicles sold last year, coupled with growing competition from aggressive suppliers such as BYD (Build Your Dreams), China FAW (First Automotive Works) or Geely, the main shareholder of Mercedes-Benz , makes Volkswagen go back to looking more at the US market.

After real successes such as the VW Beetle, which however date back decades, and sensational failures such as the diesel scandal, the US-based company from Wolfsburg now wants to attack us with a new strategy in view of just over half of the millions of vehicles sold in the 2021, apparently relying on pickup trucks. However, Volkswagen does not currently offer this type of car, which is particularly popular in the United States.

New Scout brand to bridge the gap

From 2026, therefore, the group wants to continue with its own electric car brand. The plan is to release a fully electric pickup truck and SUV under the Scout manufacturer’s name in the United States. It would be a sort of revival of the SUVs of the former car, truck and agricultural machinery manufacturer International Harvester of Chicago, which fell into the hands of the Wolfsburg company during the acquisition of the US supplier Navistar by the VW subsidiary Traton. The first sketches already exist. In a first phase, 100 million euros to invest in the project, according to people close to the company.

The search for a way to gain a foothold in the pickup market and also to reach the goal of a ten percent market share has been ongoing for some time. With the Amarok, Volkswagen light commercial vehicles have had such a model in their range for many years, but it has not been sold in the United States in all countries. One reason was a bizarre import barrier by which Washington had repaid trade barriers for exported chickens with higher import duties for certain types of cars, the so-called “chicken tax.”

As a result, domestic suppliers such as General Motors and Ford have dominated the domestic pickup business. US automakers such as Tesla and Rivian are now also active in the industry. The Ford F-150 example shows that there is a market for electric pickups. Demand for the electric version of the best-selling car model in the United States for decades has recently developed in such a stormy fashion that Ford has had to impose an order freeze. Apparently, word has spread about the benefits such a model can offer in a country hit by power outages more often than Germany. In this way, the model’s accumulator, if fully charged, can also be used to supply electricity to homes for several days.

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