CHATTANOOGA - Ford has the Explorer. Honda has the Pilot. Jeep has the Grand Cherokee.
Now Volkswagen is about to have the Atlas.
VW dealers soon will stock the Tennessee-made Atlas, a sport-utility vehicle Volkswagen needs to return shoppers to showrooms and make full use of the $1 billion Chattanooga assembly line.
A United Auto Workers Local 42 spokesman said Atlas production has reached “full steam ahead” at the six-year-old East Tennessee plant, where the 3,400 workers now assemble the seven-seat SUV alongside the factory's only other model, the Passat mid-size sedan.
Volkswagen AG, a German automaker whose nameplate trails a dozen other brands in the American market, has long relied on cars to generate sales even as U.S. consumers have shown a decided preference for light trucks -- pickups, crossovers, SUVs, minivans and vans.
Light trucks accounted for 60 percent of the 1.42 million new automobiles sold nationwide last month. Car sales slipped 7 percent in April while light truck sales rose 3.8 percent, data gathered by researcher Market Intelligence of Mahwah, N.J., shows.
“This is the first time Volkswagen has entered the affordable mid-size SUV segment,” said Mark Gillies, senior manager for product communication at Volkswagen Group of America Inc., the company’s U.S. management arm in Herndon, Va. “I think it’s very important and very significant for VW to have this model.”
Launch parties are scheduled by dealers in Tennessee and throughout the nation to show off the new mid-size SUV to motorists in May and June and take orders for delivery in the coming weeks.
Industry analysts regard the Atlas as critical for Volkswagen and its Chattanooga plant, the only VW assembly line in the United States. VW opened the plant in 2011 using $300 million in state and local East Tennessee public incentives. But the recession, falling gasoline prices, VW’s diesel scandal and an American taste for SUVs has dampened sales of the $22,400-and-up Passat.
Throughout the nation in April, almost 28,000 new vehicles of all types were sold nationwide under the VW nameplate, ranking the brand No. 13 among all 41 automobile brands on new-dealer lots in the United States, Market Intelligence data shows.
Of those VWs sold, 6,148 were Passats, a volume that amounts to less than half of VW Chattanooga’s monthly production capacity. Typical vehicle assembly plants in the United States turn out about 700 to 800 autos per day during periods like the present marked by near-record customer demand.
Relatively low demand for Passats leaves VW Chattanooga plenty of room for the new truck. Dealers say they are eager to have it.
“We’re really excited about getting the Atlas because, obviously, the SUV line up is so popular,” said Bob Metzger, a service advisor for Hallmark Volkswagen at Cool Springs, a dealership in Franklin outside Nashville.
VW dealers have had the compact Tiguan and upscale Touareg sport-utilities, though no midpoint model in the $30,000 to $40,000 range, a segment that includes Dodge Durango, Honda Pilot, Jeep Grand Cherokee, Nissan Pathfinder and Toyota 4 Runner. Ford Explorer led the segment in April, selling 22,864 copies, Market Intelligence data shows.
“We’ve been needing a vehicle in this segment,” said Jason Marshall, general manager for a pair of Gossett VW dealerships at Memphis, on Covington Pike and in the suburb of Germantown.
In Franklin, Hallmark has scheduled an Atlas launch party 2-6 p.m. Saturday, Metzger said. Near Memphis, Gossett VW Germantown will host a similar event May 27, Marshall said. In Knoxville, Harper Volkswagen plans an early June launch party. The date hasn’t been set yet.
Each dealer expects to have two or three Atlas in the showroom and a pair of models brought in for temporary display by Volkswagen. VW has readied Launch Edition models. These are the base model, designated the Atlas S, equipped with some up-model content.
Instead of the base model’s usual turbocharged 4-cylinder engine turning 235 horsepower, launch models will include the 276-hp 6-cylinder engine, sunroof and 18-inch wheels. The price is $34,875 and includes a new feature, Marshall said, that extends the 72,000-mile warranty to the vehicle’s second owner instead of having it expire when the first owner sells the truck. No rebates are expected from VW, Marshall said.
Volkswagen displayed the Atlas in January at auto shows. Reviewers at Motor Trend, a car enthusiast magazine based in El Segundo, Calif., drove a $30,500 Atlas S powered by the 235-hp engine. The verdict: other than the third row of seats, the new VW doesn't stand out.
“Its styling is inoffensive but also devoid of any clear family resemblance to other VW products,’’ says a review Motor Trend posted online April 7. “And it’s huge by VW standards… and its rear seat does something few of its competitors do: It fits full-size adult human beings."
The review questioned whether the Atlas will fall behind rival models with loud boasts, such as the Hyundai Santa Fe’s 100,000-mile warranty.
“The Atlas’ only major miss is that it has no single standout feature,” the magazine concluded, adding, “we wonder how exactly Volkswagen will attract customers. That old ‘German engineering’ tagline is a tough pill to swallow in the days after Dieselgate— and especially on an SUV designed specifically for and built in America.”
Marshall, the dealer in Memphis, figures the new truck should attract the same demographic group now loyal to Passat – middle- and upper-middle-income buyers in their 30s and 40s. Many of these drivers have to look outside VW for sport-utilities. The Atlas, he said, can return them to Volkswagen.
“This is the kind of SUV they’ve wanted,” Marshall said.
With the Atlas ready to move into full production, UAW Local 42 officials recently traveled to Germany to press home contentions that VW executives are impeding the Detroit-based union’s organizing drive at Chattanooga. VW officials don’t expect labor relations will disturb Atlas production.
“The launch of the Atlas has been typical of all launches and is proceeding on time to successfully meet our launch date,” said an email from VW Chattanooga spokesman Scott Neal Wilson, who noted plant executives and Local 42 members meet twice each month to discuss a wide range of topics.