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Business

After the ‘hippie’ bus and the Beetle, VW is looking at America again




While Volkswagen seems to be reviving the Scout brand in the US, CEO Herbert Diess has shed light on the decision and said that it represents an opportunity for the German car giant to “become much more American”.

VW announced plans to relaunch Scout as an all-electric pick-up and “robust” SUV last Wednesday, with prototypes to be unveiled in 2023 and production scheduled to begin in 2026.

In the same announcement, the company said the vehicles would be “designed, engineered and manufactured in the United States for U.S. customers.”[ads1];

“The United States is our biggest growth opportunity,” said Diess, who spoke with CNBC’s Annette Weisbach last week.

He went on to explain why the carmaker was targeting the highly competitive US market.

“We are still very niche, very small, with about 4% market share [in the country]”We want to have up to 10% market share by the end of this decade,” he said.

Diess emphasized that the company was fast, profitable and “really made good progress with electric cars.”

These vehicles include the all-electric ID Buzz, which is inspired by the T1 Microbus or “hippie” van. European versions of ID Buzz go on sale this year, with sales of an American model starting in 2024.

This image, from 1970, shows people driving a version of the Volkswagen Microbus at a rock festival in Oregon.

Brian Payne / Pix | Michael Ochs Archive | Getty pictures

VW hopes that the introduction of Scout and ID Buzz will continue its tradition of introducing iconic designs to the US market. Over the years, these have included the beetle and various iterations of the microbus, such as the one pictured above.

The scout’s history dates back to the 1960s, when International Harvester – originally an agricultural company, now known as the Navistar International Corporation – began development. Today, Navistar is part of the Traton Group, a subsidiary of the Volkswagen Group.

Production of the Scout ceased in 1980, but Volkswagen’s decision to relaunch it, and Diess’ comments, provide some clues to the strategy ahead.

“If we really want to be relevant in America, we have to look at the other segments,” he said. “And pick-ups, big SUVs, are very, very big in America.”

Diess went on to describe Scout as a “beloved brand in the United States. So it’s a good opportunity for us to become much more American.”

Read more about electric vehicles from CNBC Pro

When asked if the Scout pickup would be exclusively for the US market, he was non-binding. “I do not want to say ‘completely dedicated’, but first and foremost … it’s an American product.”

“It will be an American product for American customers, designed for the American environment. Will it be sold outside? Maybe, later to be decided,” Deiss added.

VW plans to establish a separate and independent company this year to design, construct and produce Scout pick-ups and SUVs for the US market.

Volkswagen’s focus on electric vehicles is a world away from the “dieselgate” scandal that shook it in the 2010s. Today, electrification plans put it in direct competition with well-established car manufacturers such as GM and Ford, as well as relative newcomers such as Tesla.

Regarding the company’s general outlook in the US going forward, Diess was positive.

“We are building capabilities in the United States … later this year, around August, the production of ID 4 will begin at our Chattanooga facilities,” he said.

“We have programs for Audi and Porsche to increase their market share and … we will see more products, electrical products, manufactured in America, for America.”



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