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VW to relax ambitious US sales targets?

The Volkswagen brand sold 407,704 cars last year, a 6.95-percent decline compared to 2012, and it's down a further 8.36 percent through the end of April 2014 compared to this time last year. In order to to put the sales football between its Strategy 2018 goal posts, the brand would need to add 100,000 more sales every year to achieve the lofty 800,000-unit target. Coming to grips with how unreasonable that is, VW US CEO Michael Horn has said, "For now, we have to have realistic targets."
The reasons for the brand's slow-down are imprecise, but lots of folks are throwing lots of reasons around. Last November, VW Group Chairman Ferdinand Piech told Bloomberg, "We understand Europe, we understand China and we understand Brazil, [but] we only understand the US to a certain degree so far." Analysts say the brand hasn't had midsize and compact SUV offerings, especially an overdue retail version of the CrossBlue, and the ones it does have are priced too high for their segments. It "didn't introduce enough new engines, or alternative technologies or model variants" for the Passat and Jetta. It devoted so many resources to China that the US market suffered. It was being outspent two-to-one on advertising by competitors. Its J.D. Power dependability ratings aren't high enough to overcome its past. It "has never really taken the US customer seriously." And so on.
There's still no official admission of defeat concerning the target, but reading between the lines there are some VW execs that appear to accept it won't happen short of some deus ex machina. Still,

U.S. tariff threat hits European automakers' stocks

FRANKFURT, Germany — A U.S. warning that it may introduce tariffs on foreign auto imports hit shares in German carmakers BMW, Daimler and Volkswagen on Thursday, which together have a more than 90 percent share of North America's premium car market. Washington said on Wednesday it had launched an investigation into whether car and truck imports are a national security issue due to signs they had damaged the U.S. auto industry. That could lead to new U.S. tariffs — up to 25 percent — similar to those imposed on imported steel and aluminum in March. BMW and Daimler shares fell as much as 3.1 percent in early Thursday trading, while Volkswagen's dropped as much as 2.5 percent. "(U.S. President) Donald Trump is obviously not thinking about how to prevent a trade war. Import duties on cars would be a nightmare for the German auto industry and would lead to a massive sales impact," said Thomas Altmann at Frankfurt-based asset manager QC Partners. BMW on Thursday condemned the move to consider tariffs. "The BMW Group is committed to free trade worldwide. Barrier-free access to markets is therefore a key factor not only for our business model, but also for growth welfare and employment throughout the global economy," it said. Daimler, which makes Mercedes-Benz cars, and Volkswagen, which makes upmarket Audis and Porsches, were not immediately available for comment. German carmakers produced 804,000 cars at local factories in the United States and exported 657,000 German-made cars into North America last year, according to German auto industry association VDA. China took pains on Thursday to welcome German firms and investments, with Premier Li Keqiang talking up relations after a meeting with German Chancellor Angela Merkel. BMW and Mercedes have expanded production capacity in the United States, but BMW, Audi, Volkswagen and Daimler have also invested billions to build new factories in Mexico in the hope of selling locally produced cars into the United States. German carmakers hiked vehicle production in Mexico by 46 percent to 620,000 cars last year, while production levels inside the United States fell by 6 percent to 804,000 cars because of a shift to Mexico, according to the VDA. BMW has its biggest factory worldwide in Spartanburg, South Carolina, and is the largest vehicle exporter among all the carmakers in the United States measured by value of goods exported. More than 70 percent of BMW's U.S.-made cars are exported.

How the VW diesels perform in cheat mode

Are you tired of the Volkswagen diesel emissions scandal? Yeah? We are, too. But here's a story that, at the very least, gives us something resembling answers about one of the most important questions surrounding the firestorm – how will the affected cars perform when they're in their emissions-cheating test mode? Consumer Reports was able to find out, tapping into what it believes is the cheat mode. By turning the car to accessory mode, flipping on the hazards, and tapping the gas pedal five times, CR was able to defeat the auto-engaged traction and stability controls, which it believes activates cheat mode. The safeties will reengage if it detects the rear wheels spinning, so the next step was what CR called "a hack." The team unplugged the rear wheel sensors, so the car's computers couldn't tell whether the wheels were spinning. By the way, don't try this at home. With that done, CR hit the road, testing both a 2011 Jetta Sportwagen TDI and a 2015 Jetta TDI sedan in their normal and cheat modes. Why both cars? Well, the 2011 uses the EA188 diesel, which represents the bulk of the affected cars, while the newer Jetta uses the latest EA288, which just arrived for model year 2015. The results are, in a word, interesting. The EA188 engine lost 0.6 seconds on the way to 60 miles per hour while in emissions-compliant cheat mode, and fuel economy fell from 50 miles per gallon to 46. For the newer EA288, the 0-60 difference was negligible – just a tenth of a second – while the fuel economy dipped from 53 to 50 mpg. There are a few takeaways here. First of all, and as suspected, running in cheat mode did hurt both performance and fuel economy. But perhaps more importantly, even in emissions-compliant mode, both vehicles easily beat their EPA fuel economy estimates. According to FuelEconomy.gov, the highest rated 2011 TDI Sportwagen, the manual-trans model, was rated at 30 mpg city and 42 mpg highway, with a combined rating of 34 (the auto drops the city and combined ratings by one mpg, while the highway falls by three). The best a 2015 Jetta TDI sedan can do according to Uncle Sam, meanwhile, is 31 city, 46 highway, and 36 combined with the manual (again, the auto is worse, but only by a single highway mpg). Related Video: