Volkswagen Bets on New Technology To Bounce Back from Crisis

Volkswagen's namesake brand hopes to bounce back from its diesel emissions scandal with a broad restructuring that will mean more battery-powered cars, digital services such as ride-sharing, and more SUVs for the U.S. market.

Herbert Diess, the head of the Volkswagen division, unveiled the company's Transform 2025 plan at a news conference Tuesday, saying that "in the coming years, we will fundamentally change Volkswagen. Only a few things will remain as they are."

The plan foresees a major shift in focus toward investments in electric-car technology and in software to enable new ways of using and sharing cars. The Volkswagen division alone expects to sell a million electric vehicles a year by 2025. Including the company's other brands, such as SEAT and Skoda, the Volkswagen Group expects to sell up to 3 million electrics by then.

Diess said the company would also "massively step up" its capacity to develop software, aiming to create industry-leading programs and hardware systems for digitally connected and autonomous cars by 2025.

Another element of the plan is increasing sales in the U.S. by introducing products that are more appropriate for the market, such as more SUVs and larger cars. This year, Volkswagen-badged cars have only 1.8 percent of the U.S. market through October, badly lagging competitors such as General Motors, Ford, Fiat Chrysler and Toyota.

Diess also said the company would start making electric vehicles in the U.S. by 2021. Currently Volkswagen makes Passat sedans at its plant in Chattanooga, Tennessee.

"For years, a concept for success in the U.S. has been lacking," Diess said at the company headquarters in Wolfsburg, Germany. "Sometimes we have not been on the bandwagon with new market trends."

He said regional managers would get "more local responsibility" to make decisions and meet local conditions.

The plan for the Volkswagen brand follows Friday's announcement that the division would...

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