European Auto Giants to Beef-Up US Efforts

06 January 2009

DETROIT: Some of Europe's largest auto manufacturers, including Volkswagen and BMW, are hoping to exploit the vulnerability of the American 'Big Three', Ford, General Motors and Chrysler, by increasing their investment levels and activity in the US in 2009.

German giant Volkswagen will launch a range of exclusive models in the country – including a new family sedan – as well as opening a US factory for the first time since 1978.

It will spend $1 billion (€731m; £688m) on the new assembly plant, which will be based in Chattanooga, Tennessee and produce around 250,000 vehicles a year by 2012, as it seeks to triple sales in the country to one million by 2018.

Audi, a luxury marque owned by VW, is also set to increase its US adspend by 15% on its current $80 million outlay, as well as upgrading dealerships across the country. 

Fellow German luxury auto maker BMW is aiming to expand its distribution network in America, and will launch a new One Series small car in 2009.

The company will also try and boost sales of its Mini brand by increasing the number of dealerships, with target cities said to include Chicago.

European auto brands currently enjoy a market share of just 7.2% in the US, compared with 40% for Asian rivals such as Toyota, and over 50% among the domestic "Big Three".

Data sourced from Wall Street Journal Online; additional content by WARC staff