VW ramps up Cross Sport sport utility as demand falls for cars
Atlas Cross Sport is the newest model rolling off the German automaker’s assembly line at Chattanooga, joining the Atlas sport-utility vehicle and the Passat sedan.
“We are currently assembling the Cross Sport,” VW Chattanooga communications manager Amanda Plecas said.
Volkswagen executives are scheduled to show off the mid-sized Cross Sport at a public briefing inside the 3,800-employee East Tennessee factory. The new model will seat five in two rows and is sized smaller than the three-row Atlas.
More than $800 million in local, state and federal subsidies enticed VW to the mountain city, where the plant was opened in 2011, turning out Passat sedans.
While the mid-size car was regarded by critics as a worthy rival for mid-size market leaders such as the Ford Taurus, Honda Accord and Toyota Camry, VW Chattanooga never has made Passats in the numbers the plant was scaled to produce.
Just as the sedan began coming off the assembly line, the 36 vehicle brands for sale in the United States were hit by a surge in demand for crossovers, an auto designed to look like an SUV but made of car parts.
Drivers liked the crossover’s capacious interior and seating position higher than in a sedan. Willing to do without the regular SUV’s off-road and towing prowess, Americans snapped up crossovers for urban and suburban driving.
VW sagged in U.S. market
As demand for cars waned, Ford retired the Taurus, concentrated on pickups and crossovers, while General Motors slated four car plants for closure, a move that helped precipitate the current strike by the United Auto Workers union.
VW, meanwhile, saw its car sales slide. Including autos made in Germany and Mexico, VW sold 322,948 vehicles in the United States in 2016, a volume far off its 2012 level — almost 440,000 vehicle sales. That year brought the high-water mark for Passat in the U.S. with 125,213 sales,
n 2017, relieved VW dealers welcomed the new Atlas crossover. The car-based SUV, fashioned out of the small Golf sedan, helped revive business for the brand’s 652 U.S. dealers. Volkswagen sales are running this year at about a 371,000-vehicle annual pace, including imports.
VW Chattanooga volumes remain below the plant's full capacity for making about 250,000 vehicles per year. Through September this year, the automaker has sold 59,705 Atlas copies and 12,970 Passats. Passat sales were diminished as dealers ran short of the former model while VW switched over to make the redesigned 2020 Passat.
With the Cross Sport set to reach dealers in large numbers early in 2020, and a redesigned Passat already in the market, VW executives say they anticipate sales in 2020 will surpass this year’s mark.
Figure out the market
Embroiled in a diesel scandal in Germany that cost the company billions of dollars and in 2015 toppled CEO Martin Winterkorn, who was charged with fraud, VW executives didn’t lose sight of the revolution in the American car market.
An early version of the Cross Sport was revealed as a maybe-we’ll-build-it crossover at the 2018 New York Auto Show. Alongside it was another concept vehicle, the proposed Atlas Tanoak pickup truck. It was supposed VW Chattanooga would make both.
While industry analysts say VW backed away from the pickup, figuring it would not attract big sales in a field dominated by heritage brands established decades ago by workaday pickup trucks, there was no hesitation to jump into the sport ute market.
Consumers had shown near insatiable demand for crossovers almost regardless of heritage. Demand was a long time in building, though sales now are brisk. Automakers are on pace to sell more than 2.8 million small crossovers this year.
Where the craze started
The old Chrysler Corp. had coined the idea for a truck that drove like a car after it paid France’s Renault a relatively small sum in 1987 for American Motors, a conglomeration of gloried but troubled Detroit car companies melded into one. Nameplates included Hudson, Nash, Packard, Studebaker and World War II battlefield stalwart Willys Overland's Jeep.
Chrysler soon engineered a sleek Jeep named the Cherokee, a four-wheel-drive SUV built to tow and haul like a capable pickup truck. Designed low to the ground, making it easier on adults navigating children into the back seats, the Cherokee drove more like one of Chrysler’s new inventions, the minivan, than the work truck-based SUVs of the time such as the Chevrolet Blazer, Ford Bronco, International Harvester Scout and Jeep Wagoneer.
Cherokee’s debut in 1984 started the long down cycle for the American station wagon, a trend accelerated by Japanese automakers who had no American heritage truck to turn into an SUV but found a way to replicate the nimble Cherokee. They dispensed with the work truck underpinnings. The first crossovers resembled work-like SUVs but were built of the same parts as family sedans.
After the Honda CRV and Toyota RAV4 carved out the niche in 1996, rivals waded in with similar car-based crossovers. By 2012, the crossover segment accounted for more than 1 million sales and kept growing, edging out station wagons and overtaking the traditional heart of the car market, four-door sedans and two-door coupes.
VW responds to SUV demand
VW responded with its own versions, such as the $50,000 Touareg crossover, the SportsWagen station wagon and it Alltrack all-wheel-drive version, but couldn’t find the sweet spot in the American market.
Recently the automaker sidelined some Golf small-car models and devised the Atlas out of Golf's architecture. Looking to the future, VW spent over $1 billion engineering the architecture for a new generation of vehicles that will become the basis for a major share of the VW fleet.
The Cross Sport is part of that new generation, named the Modularer Querbaukasten platform, or MBQ for short. Meanwhile, the Alltrack, SportsWagen and Touareg gave ground to the imported Tiguan crossover. The new Cross Sport is sized between Atlas and Tiguan.
Reviewers for car enthusiast magazines report the Cross Sport is not as tall or long as Atlas. The new vehicle is 5.7-inches shorter than the 198-inch Atlas, comes with the same 8-speed transmission and 117-inch wheelbase — the distance fore and aft between the wheels.
Early reviews suggest buyers can pick either a 2-liter turbocharged engine making 235 horsepower in four cylinders, or a 3.6-liter V-6 turning out 276 hp. VW dealers have reported hybrid versions are also expected, largely because VW is embracing electric cars worldwide and hybrids are a step in that direction. Workers have broken ground on VW’s $800 million electric car plant in Chattanooga.
Once it reaches dealer lots nearly next year, the Cross Sport will contend in a crowded mid-sized segment. Ford Edge, Hyundai Santa Fe Sport, Mitsubishi Outlander and Nissan Rogue have long been regarded as capable autos. They are getting company. A pair of retired models, the Chevrolet Blazer and Honda Passport, have been revived and redesigned.
Reviewers have liked the Atlas — "a formidable competitor,'' wrote market guide Consumer Reports — and compare the Cross Sport favorably to the Atlas.
“Even the suspension settings are essentially the same as those of the three-row Atlas,” wrote a Car and Driver magazine reviewer. “So on the road, the Cross Sport feels largely identical to its slightly larger brother.”
Motor1.com tested the Cross Sport pulling a travel trailer in California mountains and reported: “With the available towing package — which adds an 800-kilowatt radiator (up from 600-kilowatts), a 180-amp alternator (up from 140 amps), upgraded stability control, and trailer control, among other features — VW rates the Cross Sport at 5,000 pounds, equal to the Atlas. But even with a 3,500-pound Airstream behind our prototype, at a 9,000-foot maximum altitude dawdling through the eerie Cerro Gordo ghost town, the Cross Sport struggles to get up to speed. Once there, though, it doesn’t feel short on power.”
Now with the Cross Sport set to debut, the redesigned Passats on hand, and the Atlas racking up sales, VW Chattanooga has a trio of models with the potential of filling the assembly plant.
Volkswagen Chattanooga chief executive Tom du Plessis, a South African engineer who arrived in July after a manufacturing stint in China overseeing 24,000 VW employees, is scheduled to greet an array of dignitaries invited to the briefing.
Source: Knoxville News Sentinel, by Ted Evanoff
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published October 18, 2019