Volkswagen AG launched a new model in Mexico and is mulling a new plant to build its Beetle, underlining the resurgence of the automaker’s North American business.
The German company’s Mexican subsidiary last month relaunched the Derby three years after withdrawing it from the market in the face of tumbling domestic demand in the 1995 recession.
The Derby, known in Europe as the Polo Classic, is a subcompact aimed at young families. Volkswagen hopes to sell 7,000 units, which will be built in Barcelona, by the end of the year.
Derby will sell for $11,918, in line with cars of its size and power. It will compete against such cars as the Nissan Tsuru and Ford Fiesta.
Car and truck sales fell from 62,003 units in December 1994 to 25,686 in January 1995 and 29,753 in December 1995.
This forced Volkswagen to withdraw the model as sales dried up just months after its launch but recently the company changed tack with three launches in six months.
Volkswagen de Mexico had a trade surplus of $1 billion in 1997, and it expects this to reach $1.5 billion in 1998 as exports of the new Beetle show up in figures. The company said U.S. sales of new Beetles surpassed expectations.
To meet this demand, the company may build a second Beetle plant but has not committed itself to Mexico because it wants to strike a deal on import tariffs. European companies pay higher import duties than U.S. companies in Mexico.
“We want to reduce our disadvantage as a European company,” said spokesman Tomas Karig.
The new Pointer has been a success with Volkswagen selling all the units it can import.
Imports allow the company to present a full range of cars from Pointer through Jetta.
