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Cost-cutting measures put VW Beetle in jeopardy

Volkswagen is on a mission to cut costs. That means producing more models across its various brands based on the same platforms and powertrains, but the latest word from Germany has it that it will also mean cutting some of the VW brand's less successful models. First on the chopping block, according to German publication Der Spiegel, is the three-door version of the Polo, which will reportedly cede its place to the five-door version exclusively. The elimination of that model alone is said to save VW a good 200 million euros, putting it on its way towards reducing the brand's costs by a targeted five billion euros. The Polo isn't the only one in danger, though. The Eos, as we know, is not due to be replaced, but the future of the Beetle could be in jeopardy as well. The Beetle may be one of VW's most iconic models, but is hardly its most successful in terms of sales. With the 2014 annual report due to be released shortly, the last full-year sales figures had Volkswagen selling 109,517 Beetles in 2013. That may be more than four times the number of Scirocco models it sold, but hardly puts a dent in the 871,413 Jettas, 824,629 Golfs and 725,291 Polos it sold during the same year.

VW promises 7-seat CUV for America in 2016

On the eve of the Detroit Auto Show, Volkswagen chief executive Martin Winterkorn has confirmed the imminent arrival of a new crossover. The model, previewed at the same show last year by the CrossBlue concept pictured here, will be unique to the North American market when it arrives here in 2016. The new three-row, seven-seat crossover is part of an ambitious expansion plan on the part of Volkswagen and Audi in North America, where the two brands aim to sell a million vehicles by 2018.
That's a mighty big increase over the 600,000 vehicles which the Volkswagen Group sold here last year, but it's moving in the right direction: That number is already a 100-percent increase of what it sold here just five years ago. At that rate, VW should have little trouble meeting its goals, particularly with the arrival of the new crossover and the introduction of Golf production at its assembly plant in Puebla, Mexico. Read the full statement below for more.

VW execs didn't think diesel problem would be so serious

Volkswagen Group has admitted that former chairman Martin Winterkorn received two memos about the diesel scandal in 2014. Top execs ignored the problem because they didn't think it was a serious issue. VW disclosed these details to counter allegations in a German shareholder lawsuit that alleged the automaker violated the law by withholding the info from investors. A memo on May 23, 2014 first advised Winterkorn about emissions cheating. A memo on May 23, 2014, first advised Winterkorn about the study from the International Council on Clean Transportation, which identified the emissions cheating. According to VW, the document was part of the exec's weekend mail, and the company's investigation didn't discover whether Winterkorn actually read it. A rumor last month alleged this memo existed. Another memo for Winterkorn on November 14, 2014 was about several defects, including the diesel engines. The document estimated it would cost 20 million euros ($22 million US at current rates) to fix the problem. The chairman learned about the issue again on July 27, 2015, during a meeting on product issues. "Mr. Winterkorn asked for further clarification of the issue," according to VW's statement. Things got serious at the end of August 2015. Things got serious at the end of August 2015 when technicians explained the diesel issue to the legal department. VW came clean to the California Air Resources Board and the Environmental Protection Agency on September 3. A memo told Winterkorn the next day, which was also previously alleged. According to this investigation, management didn't believe the diesel problem would affect the stock price, and they estimated the cheating might cost at most a few hundred million dollars in fines. The execs were clearly wrong. The share price dropped after the scandal broke last September, and the problems have started to affect its divisions. According to Reuters, Audi reported it suffered 228 million euros ($249 million) in costs in 2015 from the emissions issue and repairing Takata's faulty airbag inflators. Volkswagen still doesn't know the exact costs of the scandal, but the automaker's law firm, Jones Day, plans to release a report in the second half of April to explain the whole affair. By that time, we might also know how VW plans to fix the problem because a judge recently gave the company until March 24 to outline a fix for the 2.0-liter TDI. CARB started evaluating a repair plan for the 3.0-liter TDI in early February.