Volkswagen may add U.S. dealers next 3-4 years

Retail Reuters

NEW YORK/DETROIT (Reuters) - Volkswagen AG <VOWG_p.DE> may look to significantly expand its dealership base in the next three to four years, the chief executive of its America unit said in New York on Monday.

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"I think in the 2014, 2015 window would be when there might be a significant expansion," Volkswagen Group of America CEO Jonathan Browning said, speaking on the sidelines of a media luncheon in New York.

"The first phase of our growth can essentially be handled within the existing footprint of the network," he said. "As we go through the medium to longer term, then we would have to see an expansion of our network."

Volkswagen currently has about 600 dealers in the United States. It has set aggressive sales goals for the U.S. market, where by 2018 it wants to sell 1 million vehicles. Of those, 800,000 would be branded Volkswagen and 200,000 Audi.

By way of comparison, the company sold about 360,000 vehicles in the United States in 2010.

As part of its U.S. push, Volkswagen will officially open a new $1 billion manufacturing plant in Chattanooga, Tennessee, on Tuesday. The plant makes the 2012 Passat sedan, which debuts in the U.S. market later this year. Passat production at the plant is scheduled to rise to 150,000 annually by 2012.

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Volkswagen once had a production plant in Pennsylvania, but by 1988 sales had slowed and the plant was closed.

Volkswagen has gained on global sales leaders Toyota Motor Corp <7203.T> and General Motors Co <GM.N> in the past several years, and last year it sold more than 7 million vehicles worldwide for the first time.

While its sales are improving in the United States, it still is a relatively small player, with a market share near 3 percent, including its luxury brand Audi.

Volkswagen's best-performing year in the United States was 1970, when it sold 569,696 vehicles and had a nearly 6 percent share of the U.S. market.

(Reporting by Clare Baldwin and Deepa Seetharaman. Editing by Robert MacMillan)