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

Dealer Opsby Hannah MitchellAugust 26, 2025

Franchises, Throughput Down in First Half

A handful of states see franchise growth through June, while EV sales per store boost overall business in U.S.

Read More →
Dealer Opsby Hannah MitchellAugust 19, 2025

Buy-Sells Up in Q2

Kerrigan metrics show there’s plenty of demand, though many sellers are waiting to pull the trigger.

Read More →
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 →
Ad Loading...
Industryby StaffMarch 26, 2025

March New-Vehicle Sales Healthy

Despite incentive spending not keeping pace with deliveries volume, consumers make their purchases ahead of tariffs impact.

Read More →
Product & Technologyby StaffMarch 13, 2025

New DOWC Program Debuts

Hybrid solution combines benefits of reinsurance and dealer-owned warranty companies.

Read More →
Trainingby StaffJanuary 13, 2025

Dealer Survey Finds Anxieties

Kerrigan Advisors poll shows percentage of retailers expecting lower profits, valuations is on the rise.

Read More →
Ad Loading...
Industryby StaffDecember 23, 2024

Calif. Dealer Group Challenges Scout Direct Sales

Says VW unit’s plans to sell directly to consumers violate state law.

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 OpsOctober 14, 2024

Autumn Analysis

Consider taking the change of the seasons as a cue to evaluate some key operational aspects of the dealership.

Read More →
Ad Loading...
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 →