(Bloomberg) — Volkswagen AG is breathing life into the defunct Scout offroad vehicle brand with a plan for a rugged electric sport utility vehicle and pickup model to capture market share in the US, where the company has long struggled.
Europe’s biggest carmaker, which already counts 10 different automotive brands, plans to set up an independent company in the US this year that will design and make the vehicles, VW said Wednesday. Success in the world’s second-biggest auto market has eluded the manufacturer because of a lack of SUVs and pickups.
“Electrification provides a historic opportunity to enter the highly attractive pickup and R-SUV segment as a group, underscoring our ambition to become a relevant player in the US market,” Chief Executive Officer Herbert Diess said in a statement.
Reviving Scout would add yet another brand to VW’s stable of nameplates that include Audi, Porsche and Bentley — even as the company has said it wants to make the German behemoth leaner to better compete with the likes of Tesla Inc. and Rivian Automotive Inc. The desire to streamline is competing with Diess’s goal of more than doubling VW’s market share in the lucrative US market to 10%. That target will require focusing on the larger vehicles that appeal to local drivers.
The Scout brand will be an independent company within the VW group that’s going to be managed by a separate team “to align with the new group steering model,” Chief Financial Officer Arno Antlitz said in the statement.
The Wall Street Journal earlier reported on the plans, saying VW aims to invest more than $1 billion to ready the project, while it’s open to inviting external investors and eventually may take the business public.
Reviving Scout via a platform designed specifically for off-road use is an interesting move, “albeit a competitive one where they will be late behind Rivian, Ford, RAM,” Redburn analysts led by Charles Coldicott said in a note on Wednesday.
Diess has vowed to turn around Volkswagen’s performance in the US, including plans for battery and automotive plants. Earlier this month, he hinted at potentially deeper ties with partner Ford Motor Co. The pair in 2019 decided to cooperate on electric and self-driving car technology to save costs. Ford is using VW’s electric-vehicle platform for mass-market cars in Europe where Ford plans to produce a second electric model.
While sales for VW’s main brand in the US climbed 15% to about 375,000 units last year, that’s still a far cry from the more than half a million vehicles the company delivered during the late 1960s and early ’70s, when the Beetle and original minibus proved popular with American drivers.
READ: VW CEO’s Road Trip Underscores Eagerness to Be Relevant in U.S.
It won’t be easy. Japanese automakers’ efforts to ding Detroit’s dominance of pickups have largely failed, with Toyota Motor Corp.’s Tundra and Nissan Motor Co.’s Titan never coming close to the volumes mustered by Ford’s F-Series or General Motors Co.’s Chevrolet Silverado.
Scout vehicles competed with the Ford Bronco and Land Rover and Jeep models from the 1960s until the business ceased production in 1980. VW bought the name as part of its acquisition of Navistar International Corp. in 2020.
(Updates to include company confirmation of plans.)
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