Volkswagen AG has no plans to taper US investment despite the recession, but believes government needs to play a strong role in boosting consumer interest in fuel efficient vehicles, the company's chief executive said on February 03.
"You have to give consumers some encouragement tax incentives to buy these vehicles," Stefan Jacoby told Reuters in an interview on the sidelines of the Washington Auto Show. "As soon as fuel prices went down they went back to their old habits."
Congress is considering a credit in economic stimulus legislation to spur interest in plug-in hybrids, which are currently set to come on line between 2010-12. Tax credits were essential in driving sales of the most popular gasoline-electric hybrid, the Prius made by Japan's Toyota Motor Corp. Jacoby also said the move to mass market adoption of plug- in hybrids and other zero-emissions concepts will take longer than many people believe.
"We have to understand there needs to be a realistic transition time," Jacoby said, estimating that a decade or more may be needed.
"There are a lot of problems to solve in terms of safety, recycling, engines - there is no infrastructure. It's not so easy." Auto shows this year are awash in "green car" designs and aggressive promotions of gasoline-electric hybrids, all electric vehicles and those models running on fuel cells, a technology considered many years from mass market application.
Like its US and Japanese rivals, Germany's Volkswagen is designing hybrids, fuel cell cars and all-electric vehicles. But it is moving most aggressively on more efficient gasoline engines and emissions stingy clean diesel.
Volkswagen will offer clean diesel in up to 30 percent of the cars that come with a diesel option, including the mid-size sedan the company will build in a plant now under construction in Chattanooga, Tennessee. A confident Jacoby said Volkswagen has no plans to trim its $1 billion investment in the Tennessee production facility that is being built to roll out 150,000 vehicles.
"We determined that the United States is one of our key strategic markets for growth and that means you have to invest in products and invest in manufacturing capacity," Jacoby said.
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