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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,

Volkswagen might cut 40 models across brands to save cash

Volkswagen once set out to pass Toyota and General Motors and become the largest automaker in the world. Following months of fallout from the diesel emissions scandal, the manufacturer is rumored to be dropping around 40 models from its company-wide lineup. According to German business and finance publication Handelsblatt, the Volkswagen Group is looking to slim down and remove a number of low-volume vehicles from various lineups. The company currently sells around 340 models across brands that include Audi, Lamborghini, and Bentley. Volkswagen is refusing to comment, but Handelsblatt claims to have sources within the company. Last week, Volkswagen Group CEO Matthias Muller announced a new strategy for the company that includes a major focus on electric vehicles and new technology services. During his announcement, Muller said the company would be cutting a number of models, but at the time no numbers, models, or brands were discussed. Despite comments to the contrary, rumors have persisted since late last year that Volkswagen was looking to sell commercial truck and bus manufacturer MAN. Volkswagen owns truck and bus manufacturer Scania, so even if it dropped MAN, the company would still have a foothold within the bus and truck market. There is also talk of the company selling Italian motorcycle manufacturer Ducati, which Volkswagen acquired via Audi in 2012. The company's image has taken a huge hit in the wake of the diesel scandal. Volkswagen has set aside cash in order to pay fines and may be looking to sell these several subsidiaries and cut low-volume models in order offset the costs. Despite the scandal, the company led worldwide sales in the first quarter of 2016. The same was true in 2015, but sales tanked at the end of the year following the diesel revelations. Related Video: Rumormill Audi Bentley Volkswagen Ducati

To solve diesel problem, VW might need two fixes

Volkswagen says that a fix is on the way for its 11 million vehicles around the globe that are equipped with diesel engine software that can evade emissions tests. The problem might be far more complicated than simply creating a single solution for all of them, though. According to Automotive News citing Reuters, two remedies to cover different NOx-reducing systems could be necessary, and both potentially affect performance. Earlier examples of the EA 189 diesel engine used a lean NOx trap to reduce the harmful material coming from the tailpipe. According to experts in the Automotive News report, a software update might allow the engines to achieve compliance, but that could affect fuel economy. VW already tried this route once before the scandal came to light, but tests by the California Air Resources Board still showed the figures were too high. Later, some of the 2.0 TDI engines began using Selective Catalytic Reduction that reduced NOx by injecting a urea solution into the exhaust stream. According to Automotive News, a software update for this equipment might increase the amount of the substance used. Not only would that mean topping up the fluid more often, but there still could be some reduction in fuel economy. But, since the 2-liter, 4-cylinder TDI engine that sits inside the diesel vehicles first mentioned as being affected by the issue in the US don't have a urea treatment system, VW would need to install them into these cars. VW still hasn't officially outlined its solution (or solutions) to the emissions issue but is expected to soon. The automaker's long-term evasion of regulations with these diesel engines pumped vast quantities of additional NOx into the air. The substance is known to be linked with smog and acid rain. The US Department of Justice is already beginning an investigation into the company, and politicians are pushing for harsh punishments.