Volkswagen of America
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Volkswagen of America is the U.S. subsidiary of the Volkswagen automobile company in Germany. Formed in April 1955 in Englewood Cliffs, New Jersey to standardize dealership service in the United States, it grew to 909 Volkswagen dealers in the United States by 1965 under the leadership of Dr. Carl Hahn. Under him and his successor as president of Volkswagen of America, J. Stuart Perkins, VW's U.S. sales grew to 569,696 cars in 1970, an all-time peak, when Volkswagen captured 7 percent of the U.S. car market and had over a thousand U.S. dealerships. The Volkswagen Beetle was the company's bestseller in the United States by a wide margin.
From then on, however, intense competition from American and Japanese automakers caused VW sales in America to fall as much as 87 percent between 1970 and 1992, despite the introduction of new front-drive models in 1975 to replace the Beetle and its rear-engined, aircooled stablemates. As a result, the number of dealerships in the U.S. was reduced to 630 by the mid-1990's. Also, an attempt to build Volkswagens in America with a factory in Pennsylvania that opened in 1978 lasted only ten years. A great upheaval occurred in the early eighties as the manufacturing division and the sales division were merged and Volkswagen of America moved to Troy, Michigan as a result, finally settling in Auburn Hills, Michigan in 1991.
Volkswagen of America hit rock bottom in 1993, with fewer than 50,000 cars sold that year, and many observers expected VW to quit the United States. Sales began to recover the following year, however, and by the end of the decade, thanks to effective advertising and the launch of the Volkswagen New Beetle in 1998, the VW brand was back on firmer ground. Volkswagen of America went on to sell 355,648 cars in 2001 - its best year since 1973.
In the 2000's sales have tapered due to quality control problems, and VW's U.S. sales for 2005 totalled 224,195 - a reduction of about 37 percent from four years earlier. New models for 2006 and 2007 and increased sales in the first half of 2006, however, indicate steady sales for Vollkswagen of America in the future. A new advertising agency is expected to help maintain VW's presence in the U.S. as well.
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