The war in Ukraine will help to boost VW dealership inventory in the United States as the automaker shifts more of its production to North America and China.
Speaking during the automaker’s annual press conference, chief executive Herbert Diess said VW will increase output at its plants in Chattanooga and Puebla, Mexico while also increasing production at the Audi plant in San Jose Chiapa, Mexico. This means the production of the Atlas, Atlas Cross Sport, Tiguan, Taos, and Audi Q5 will increase.
Diess noted the changes come as the war has forced the automaker to reduce capacity at some European factories. It will also reallocate semiconductors otherwise destined for Europe to North America and China.
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While it is unclear when the production changes will be made, the chairman of the VW National Dealer Advisory Council, Tom McMenamin, told Auto News that dealerships in the U.S. are expecting to “see a substantial number” of additional North American-built vehicles hit their lots.
“It’s going to make all the difference in the world to the dealers, and it’s going to give us a competitive advantage in our markets because we’ll have products and most of our competitors won’t,” McMenamin added.
During the press conference, Diess noted that wire harnesses ordinarily sourced from Ukraine is a significant supply chain constraint the company is dealing with and affecting most of its German plants. Diess added that shortages, supply bottlenecks, and high commodity prices may impact the automaker’s growth throughout 2020.
The German car manufacturer sold 375,030 vehicles in the U.S. last year, a 15 per cent increase over 2020.
