May 30, 2012 / 11:53 PM / 5 years ago

Volkswagen Americas CEO sees May US auto industry sales up

* VW exec says mid-sized crossover ‘under discussion’

* VW exec sees ‘modest’ recovery in U.S. auto sales this year

By David Bailey

DETROIT, May 30 (Reuters) - Automakers are expected to report an increase in U.S. new-car sales of 20 percent to 30 percent in May from a year earlier under a “steady solid recovery” in 2012, Volkswagen Group of America’s top executive said on Wednesday.

New-car sales started strongly the first part of May for the industry, softened during the middle of the month “and then came back again over the Memorial weekend,” said Jonathan Browning, president and CEO of Volkswagen Group of America.

Sales are likely going to be stronger than the 20 percent increase Volkswagen initially forecast, but not as strong as the 30 percent plus increase some have forecast, Browning told reporters at an Automotive Press Association event.

Edmunds.com forecast a 31 percent increase in sales for May.

Volkswagen, which expects 2012 U.S. sales of more than 500,000 from its group of brands, has been more conservative in its full-year industry forecast than others as well.

Volkswagen expects industry sales of about 13.9 million vehicles, while J.D. Power and LMC Automotive expect sales of 14.5 million, an increase of about 13 percent from 2011.

The more conservative forecast factored in potential customer uncertainty from the euro zone crisis and the U.S. elections, but a “steady solid recovery” overall, he said.

“It may be at a modest instead of at a spectacular pace, but it is strong recovery and that is certainly what we are hoping to see continue throughout this year and into next year,” Browning said.

Volkswagen is expanding production capacity at a plant in Chattanooga, Tennessee, to up to 180,000 vehicles per year, from 150,000. It is increasing staffing to 3,500 workers from 2,500.

In a later phase, Volkswagen could increase capacity to 250,000 vehicles per year with improvements in its body shop, paint shop and in general assembly, Browning said.

It has room at the Chattanooga site to double production capacity to 500,000 vehicles per year in a later phase that would not be intended for a single product, he said.

Browning said a mid-sized crossover was “certainly under discussion” to round out Volkswagen’s product lineup in the United States, although he did not say where it might be built.

“If you could give it to me tomorrow, I would be very happy to have it tomorrow,” he added.

Our Standards:The Thomson Reuters Trust Principles.
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