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Can VW Overtake Toyota and GM To Become #1?

hpmctorquehpmctorque Member Posts: 4,600
Volkswagen recently said that by 2010 it can produce 10 million vehicles and pass Toyota and General Motors, to become the world's largest car company.

According to the (London) Sunday Times, "To those who suggest that closing a 3m vehicle gap (Toyota produced 9.4m last year) is a very tall order, company management explains that, in 2006, the number of conventional passenger cars made by Volkswagen and Toyota was fairly similar -- 5.2m for Volkswagen and 5.5m for Toyota -- and that the difference is made up by 4x4s, people carriers' and light trucks."

Volkswagen introduced a full range of these multi-purpose vehicles only recently, but apparently they'll play an important role in VW's future growth.

The big question I have on this is whether VW's more exciting designs and dynamic driving experience can offset Toyota's superior reliability record, and/or whether VW can narrow the reliability gap sufficiently to reach this ambitious goal. Also, I wouldn't totally discount the possibility that GM may retain its #1 position (or regain it, if it loses it in '08). Richard Waggoner has publicly stated that GM will not passively concede its world sales leadership to Toyota, but will, instead, fight to retain it. Official statistics indicate that GM squeaked by Toyota in '07, but, as we know, Toyota has the momentum.

One thing to consider is that because Toyota has been so strong in the U.S., surpassing Chrysler, then Ford in our market, we may tend to overestimate Toyota's strength vis-a-vis GM and VW worldwide.

Your thoughts on all this?
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    bumpybumpy Member Posts: 4,425
    China. The more important questions is whether VW has the production capacity and supplier infrastructure to build 10 million cars, because they need to have it in place now to build 10m cars the year after next.
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    fezofezo Member Posts: 10,386
    I can tell you that where I was in China five and a half years ago there were Volkswagen a plenty. Mostly diesel Jettas that were taxis. They were all over the place.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
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    hpmctorquehpmctorque Member Posts: 4,600
    Whether or not VW has the production capacity - and my guess is that they probably do, with overtime - 2010 seems unrealistically soon for such a change. I think it will take many years, and much better performance in North America, if VW is to indeed achieve this goal. Is it possible, at a later date, say, by 2018? I think it's possible.
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    gagricegagrice Member Posts: 31,450
    I think as the Chinese market expands, VW will be one of the leaders. Toyota and the other Japanese companies will have a harder time in the market. There is still a lot of animosity between the two countries.
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    fezofezo Member Posts: 10,386
    Yes, they are starting to let Toyota get a foothold but there is long animosity between the two countries.

    Volkswagen has already established a firm foundation in China. If their market continues to grow the way it is now VW will be in good shape. Number 1 by 2010? No, I don't think so but I could see them selling that many cars not long after that.

    That said, GM isn't exactly unheard of in China either. Buick there has the market segment that they'd like to have over here.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
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    lemkolemko Member Posts: 15,261
    Buick sells all kinds of cars in China from a subcompact called the Sail to a really nice luxury LaCrosse and Royaum. Geeze, if NA Buicks were that nice, who needs a Cadillac? I'm starting to see a nice change for NA Buicks in the form of the Enclave and Lucerne. Heck, even the LaCrosse as it is is a quantum leap from the dismal Centuries and Regals of the recent past.

    VW may very well overtake Toyota and GM in the world market if it captures the majority share of the Chinese market, but it won't overtake either in the NA market.
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    fezofezo Member Posts: 10,386
    I can't imagine how VW makes a better dent in the NA market. They had it just about perfect in the 2000 model year with a Passat as perfect as it was going to get and then had to deal with typical VW issues. Glitchy electrical systems and overall lousy reliability.

    It will take many years of reliable Volkswagens to get rid of that image.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
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    gagricegagrice Member Posts: 31,450
    VW has been held back selling their real economy cars here with diesel engines. I think much of their reliability problems are in those engines they bang together for our market. I had no issues with my 05 Passat TDI. I would imagine worldwide they sell over 50% diesel cars.
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    fezofezo Member Posts: 10,386
    How long did you have that Passat? I have a friend who had a 2000 (yeah, we're doing anecdotal evidence for a minute) with the six and it seemed pretty good for a few years but then had some really major issues.

    I very nearly bought a 2000 Passat when I got my Accord. Having once owned a Rabbit I got cold feet.... Maybe just as well. The only VW dealer within convenient range burned down a few months later.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
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    gagricegagrice Member Posts: 31,450
    I kept the Passat for a year and sold it. That was my plan to start with. It was too small and low to the ground for my taste. I wanted to see just how much I could make and was very happy with $3000 profit after driving it just 8000 miles. Try that with any gas vehicle. Supply and demand has kept the VW diesels high on resale especially in CA.

    PS
    I could have sold 10 at that price. My phone rang off the hook for a month after the ad was pulled.
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    gagricegagrice Member Posts: 31,450
    Thinking about it. If VW would ship low mileage VW TDIs to their dealers in the CARB states they could make a killing. Not sure how they would export them from Germany.
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    fezofezo Member Posts: 10,386
    What a good idea. Wish I'd thought of that in 2005...
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
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    steverstever Guest Posts: 52,454
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    andys120andys120 Member Posts: 23,445
    There's no way for VW to surpass both GM and Toyota in worldwide sales before perhaps mid-century. Toyo is well-established in the Americas and Asia outside of China. Europe is their weak spot but getting less so all the time.

    GM now dominates the China market having wrested it away from VW. I don't see how VW comes back in China, a araket where their own domestics are beginning to show strength.

    2001 BMW 330ci/E46, 2008 BMW 335i conv/E93

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    scape2scape2 Member Posts: 4,123
    has deep pockets and great resources. However, I don't see them being any real large threat to GM/Toyota. Also, don't count out the Koreans. Hyundai is no slouch. Thier products have improved greatly just in the last 5 years to match even the Japanese/American vehicles. VW is not going anywhere. I see VW making its foot print in Eastern Europe/Russian markets.
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    nippononlynippononly Member Posts: 12,555
    Yes, but at the same time Hyundai's sales have slumped badly since mid-decade.

    Don't count out Honda - I know they are smaller than the industry giants right now, but they just keep growing and growing, even as the rest of the industry suffers.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

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    steverstever Guest Posts: 52,454
    "Jacoby acknowledged that VW "did a lot of things wrong" to earn a U.S. reputation as unreliable and costly to maintain. But he said improved quality — "our warranty costs are down considerably" — and a new three-year free maintenance offer should raise perceptions."

    Volkswagen's U.S. plant may make Porsches, Audis
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    nippononlynippononly Member Posts: 12,555
    Porsche had already announced that no way was the U.S. plant going to build any Porsches?

    VW may face the same problem as the domestics on the quality issue - it takes a few years to trash your rep, but FIFTY to get your rep back, if you EVER recover completely.

    I think it's totally unacceptable that VWs had problems that couldn't be fixed at all by the dealers, and other problems for which parts were backed up 6-8 weeks or more while the cars sat undriveable.

    Any company that would act with that little quality control and that little forethought would make me hesitate STRONGLY before buying one of their cars, even a decade later.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

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    larsblarsb Member Posts: 8,204
    VW has about as much chance as catching Toyota by 2010 as I do of winning the PowerBall Lottery two weeks running.

    Why is this even a serious forum?
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    grbeckgrbeck Member Posts: 2,358
    Because VW management itself said that the company would do this. At the very least, it's an opportunity to comment on what this says about VW management.
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    gagricegagrice Member Posts: 31,450
    I think it's totally unacceptable that VWs had problems that couldn't be fixed at all by the dealers, and other problems for which parts were backed up 6-8 weeks or more while the cars sat undriveable.

    All you have to do is follow the Honda and Toyota threads to see this happens to both of them also.
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    lemkolemko Member Posts: 15,261
    ...it is a possibility if VW is very popular in China. If the Chinese market explodes and VW has the major market share, they could overtake both GM and Toyota.
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    gagricegagrice Member Posts: 31,450
    Why is this even a serious forum?

    I believe VW is number one is several markets. The EU, South America, Mexico and China. Plus they are a lot more enjoyable to drive than anything Toyota builds.
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    nippononlynippononly Member Posts: 12,555
    Neither Toyota nor Honda has ever issued a recall for a problem which made the affected vehicles undriveable and for which the required parts were so back-ordered that many owners had to wait 6 to 8 weeks or longer.

    That is the exclusive domain of VW and Ford (Firestone recall), I believe. And in Ford's case, the vehicles could be driven (at the owner's peril), although their recommendation was not to.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

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    british_roverbritish_rover Member Posts: 8,502
    Oh I am sure I could find a couple of recalls or at the least TSBs that caused cars to sit for six to eight weeks from almost any brand. A situation like that is a lot easier then you think to happen.
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    larsblarsb Member Posts: 8,204
    Well, GarO, that would matter in sales numbers if more than 2% of people chose a car using "enjoyable to drive" as a primary decision point.

    But they DON'T.

    Sometimes a person might narrow it down to two cars, and choose the "more fun to drive" car over the other primary contender.

    But no one I know or have ever heard of starts out their car search by saying, "I'm going to go buy the MOST FUN TO DRIVE car I can find."

    At least not for a primary vehicle. Maybe a middle-aged man who wants a fun sports car might use that as a primary decision point.

    Ride and Handling never even come into play at all with most people. Car suspensions have advanced to the point where almost every car has a good ride and handles ADEQUATELY.

    Unless you are living on or commuting over or across a LONG curvy mountain road on a daily basis, ride and handling are not big sticking points for the VAST majority of people.
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    larsblarsb Member Posts: 8,204
    Here are some other pages that list why people choose the cars they choose.

    Survey 1

    Survey 2

    Survey 3

    I'm having a hard time finding a survey that even puts "fun to drive" in the conversation at all.

    Can you find one?
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    andys120andys120 Member Posts: 23,445
    VW is no longer number one in China, GM passed them in sales a couple of years ago IMO.

    2001 BMW 330ci/E46, 2008 BMW 335i conv/E93

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    moocow1moocow1 Member Posts: 230
    Interesting topic...unfortunately I don't think VW has any chance until they do improve their reliability. That's the #1 reason I would never buy a current VW. And sadly I want a turbodiesel too. Get VW to up the warranty and get to at least mid-pack reliability and I'll start looking at them again.
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    steverstever Guest Posts: 52,454
    Beer and Krystal hamburgers anyone? (they'll bring the beer).

    VW chooses Chattanooga for new factory (Inside Line)
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    gagricegagrice Member Posts: 31,450
    VW has moved into a solid 3rd place worldwide. Is GM next to fall behind VW?
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    fezofezo Member Posts: 10,386
    If VW could bring themselves to market their diesels in good numbers and put some service in their customer service they could revive their US business. If they could pull that off watch out.

    It kills me with VW. They always have nicer looking product than pretty much anyone they compete with but they have spotty reliability and expensive repairs.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
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    gagricegagrice Member Posts: 31,450
    I'm wondering if the US market is all that big of a prize anymore. It was pointed out that the shortage of Prius could be they make more selling them in other markets. The dollar has made cars not built in NA a loss leader. Until VW builds their new plant in TN I am not sure we will see a lot of the diesels here. I think their diesel is the key to future sales.

    I have dealt with two VW dealers. One in Portland where I bought my 2005 Passat and Drew VW here in San Diego. When my gas cover was broken by a gas station attendant in Oregon, I brought it to Drew VW in CA for replacement. They replaced it under warranty and gave me a rental car overnight as they had to paint the cover to match the car. I thought that was great service from a dealer that had not sold the car. I did the only service for the time I owned the car at Drew. It was a lot cheaper than service on my Sequoia at the Toyota dealer. And Toyota used very cheap 30 W dino oil. I was not impressed with the Toyota service. They politely told me what they could not do for me.
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    nippononlynippononly Member Posts: 12,555
    Hw long is it before VW becomes merely a subsidiary of Porsche?

    We may need to change the title to "Can Porsche overtake Toyota and GM..."

    What a hoot if Porsche were the #1 automaker in the world...

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

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    fezofezo Member Posts: 10,386
    If VW becomes a subsidiary of Porsche and the cars reflect that I am so there!
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
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    gagricegagrice Member Posts: 31,450
    It is only fitting. Dr Porsche designed the first Volkswagen for the German Government in the early 1930s. They already share technology if I remember correctly.
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    nippononlynippononly Member Posts: 12,555
    Not much. They do share the Cayenne/Touareg model, but for instance when Porsche needed a new automated manual transmission, did it adopt the much-praised DSG from VW? No, it developed the PDK completely independently.

    It is just that Porsche has more money these days than it knows what to do with, and so it has been buying its way into a large stake in VW. If it can get its hands on more, last I heard, it could get a controlling share. And that may be old news, I haven't been keeping up with it that closely.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

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    gagricegagrice Member Posts: 31,450
    If VW can maintain those kind of numbers they will sell close to 6.5 million vehicles world wide. How many did GM and Toyota sell first 7 months of this year?

    Volkswagen posts record sales through July 2008 thanks to expanding regions
    Nate_Martinez

    Volkswagen is breaking its own sales records during the first half of 2008 and has posted a sales volume of 3.79 million vehicles worldwide from January to July. Last month, Europe's largest automaker moved 521,500 global units, a significant achievement given the struggling automotive market. During the first seven months of the year, 2.18 million cars were sold to European buyers, with 624,000 going to Germany alone. The only surprising drop in sales (down 4.5%) came from the rest of Western Europe that took delivery of 1.22 million cars during the same seven-month time span.

    Much of VW's growth can be attributed to its appeal in the BRIC regions (Brazil, Russia, India, China) and areas of Eastern Europe. China is a close second behind VW's usual best-selling market, Germany, and is expected to surpass it by the end of the year.

    "These record deliveries and growing market shares have been made possible by our growth strategy, particularly in the BRIC markets, and our model diversity, even though the general situation on global automotive markets continues to deteriorate," said Detlef Wittig, executive vice president Group Sales and Marketing for Volkswagen.

    Here are the sales figures straight from the horse's mouth. All numbers cover the first seven months of 2008 and each percentage is compared to last year's sales amount for the same period.
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    gagricegagrice Member Posts: 31,450
    Profit for the Volkswagen Group rose 28.5 percent to 3.7 billion euros (about $5.6 billion, depending on the exchange rate) for the first nine months of 2008, bucking the downward trend for most automakers, and in sharp contrast to the troubles of the Detroit 3.

    VW said it continues to expect that its sales, revenue and operating profit for the full year will be ahead of 2007, “despite the dramatic deterioration in global economic conditions and the automotive industry environment in recent months,” said CFO Hans Dieter Poetsch.


    http://industry.bnet.com/auto/1000330/vw-sales-profits-on-the-rise/

    Will VW pass GM this year on their way to besting Toyota World wide? VW the only major that shows an increase in profits this year.
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    nippononlynippononly Member Posts: 12,555
    VW certainly has been doing well this year, and I could see them boosting their global sales big-time in the next few years as long as Porsche doesn't meddle too much.

    But this: wants to sell around 800,000 units a year by 2018

    is an unrealistic goal for the U.S. The prices of the cars are too high to compete well in the segments they are perceived to inhabit. VW wants us to believe that their cars are worth a premium over the Accords and the Civics of the world, but the American buyer has disagreed for some time.

    Now the same thing is happening with crossovers: $29,5 for the cheapest AWD Tiguan??? They will never compete with Escape, CRV, and RAV that way.

    And they will never be very successful at lowering their prices and competing on volume until they get more than the Tennessee plant on-line in production in North America. The dollar-euro exchange will hold them in check until then. I figure it will take them a few years to bring Tennessee on-line, and another five to get another plant built if they can even justify the expense, so you're already pretty much at 2018 before the second plant can even boost numbers very much.

    Lots of companies, GM and Toyota prominent among them, have focused too much on market share (North American or global) at their peril. The goal should be PROFITS, and profitable sales.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

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    gagricegagrice Member Posts: 31,450
    They will never compete with Escape, CRV, and RAV that way.

    Probably true as those are cheapo made vehicles. The real key to big numbers in the US will be the plant in TN. And diesel engines. I would look at the Tiguan with a small diesel engine as a runabout. The Touareg with a V6 diesel would also be a good choice. I think VW is still number one in the EU and China. China will pass US up in importance in the not too distant future. I have no idea what VW is trying to do selling Chrysler mini vans with their logo. That should cheapen the brand a bunch. They still have the only small diesel that passes the 50 State emissions without Urea injection.

    The Dollar value is helping currently with US sales from Germany. Only time will tell.
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    bvdj84bvdj84 Member Posts: 1,724
    Well with their incentives they have been offering on most of their models, its no wonder one would want to drive a VW. Yes, they are so much fun to drive! They offered deals so good back in the Spring, I could have gotten a $30k VW for the price of a $22k VW. They are offering deals now, and they are typically seen offering deals on cars soon after a new model has come out, unlike most company's. The Tiguan is new, and you can drive one for a really nice lease. They seem to offer far more attractive deals then most. I think they really understand the concept of leasing. Honda, their leasing is so close to actually purchasing it, having a loan on it. So what is the point?
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    steverstever Guest Posts: 52,454
    Toyota is not going to open their almost finished factory in Tupelo as scheduled. (AutoObserver.)

    So, will VW likewise delay the new Chattanooga plant that's not nearly as far along, or try to take this opportunity to position itself as the lead automaker in North America in a year or three?
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    fho2008fho2008 Member Posts: 393
    Yeah VW is selling so many cars they have to have Chrysler make mini vans for em!!

    #1 by 2010? thats a year away, 2015, Yes
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    gagricegagrice Member Posts: 31,450
    I wondered about that also. VW makes great mini vans in the EU. Why would they go with the substandard Chrysler MV platform? I guess they are selling better than expected. With the turmoil here in the US, VW is doing better than average. They have the best economy cars in the EU. If they would import them into the USA. Are they still on schedule to build a big factory in TN?
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    nippononlynippononly Member Posts: 12,555
    Why would they go with the substandard Chrysler MV platform?

    I think the European VW van is underpowered for the American market and overpriced due to the poor euro-dollar exchange. So they elected to have Chrysler build full-size minivans domestically for them instead. I would love to know how sales are so far for that model. One thing I read implied they were off to a good start.

    I just don't see VW overtaking Toyota in global sales, unless they buy some more foreign car companies and combine the sales totals.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

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    steverstever Guest Posts: 52,454
    Are they still on schedule to build a big factory in TN?

    I have family in Chattanooga and it sounds like the infrastructure work is going ahead as planned (roads, water, sewer, etc.). But VW is dropping hints that actual construction may be delayed or the size of the factory may be smaller than planned. Lots of people are holding their breath hoping it doesn't fall apart.
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    berriberri Member Posts: 10,165
    I dunno, seems to me that historically every time VW starts to get on a roll here they somehow manage to step on their crank.
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    gagricegagrice Member Posts: 31,450
    They only seem to mess up here. They are number one in the EU, China & Brazil. China will be the country to push them past Toyota. They have a lot of small very high mileage cars that the EPA does not want in the USA. So we will get the dregs as usual.
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