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VW Names Former GM Manager Browning as U.S. Chief

Volkswagen Group of America Names New CEO
Jonathan Browning has been named president and CEO of Volkswagen Group of America. Photographer: Paul Ellis/AFP/Getty Images

Volkswagen AG, Europe’s largest carmaker, named Jonathan Browning to head its U.S. operations, putting an end to a 2 1/2-month leadership vacuum at the unit.

Browning, a former General Motors Co. executive who joined VW in June, will take over as president and chief executive officer of Volkswagen Group of America starting Oct. 1, VW said in a statement today. Predecessor Stefan Jacoby last month became CEO of Volvo Cars, the Swedish automaker owned by China’s Zhejiang Geely Holding Group Co.

Browning, 51, was hired by VW this year to improve coordination of the carmaker’s international sales. He was previously vice president of global sales, service and marketing at GM. The appointment coincides with final preparations for introduction of a new Jetta compact, VW’s best-selling American model. VW is preparing to open a factory in Tennessee and present its first car built exclusively for the U.S. market.

“The major part of his career was outside the U.S.,” said Christoph Stuermer, an analyst for IHS Automotive in Frankfurt. “Just because he worked for GM doesn’t mean he understands the U.S. dealer mentality. I’m curious to see what he comes up with.”

Browning, a former chairman of GM’s U.K.-based Vauxhall division, was previously in charge of marketing at GM Europe and ran the carmaker’s Turkish division. He worked for GM from 1981 to 1997 and returned to the Detroit automaker in 2001 after a stint at Ford Motor Co., where he left as managing director of the Jaguar brand.

‘Work to Do’

“We’ve got a good start, but we’re also very firmly with our feet planted on the ground,” Browning told reporters today at a news conference in Washington. “We know we’ve got a lot of work to do with a lot of facets of the business. We have still not passed our 1970s sales record.”

The company aims to increase its market share in the U.S. with its redesigned Jetta, a new mid-size sedan that will be built in Tennessee, and the Beetle, an iconic car in the market, Browning said. The new Jetta, which will go on sale next month, is VW’s first model redesigned especially for the U.S. market.

“This challenge is very much more a marathon than a sprint,” he said. “What I would like to see is the VW Group is seen as an essential part of the auto industry in the U.S.”

Browning, who said he earned an MBA at Duke University in Durham, North Carolina, and has twice lived in the U.S., called the job “a really exciting challenge” and said he took it after VW sales chief Christian Klingler asked him to head the U.S. unit based in Herndon, Virginia.

Eighth Loss

Volkswagen is heading for an eighth annual loss in the U.S. Reviving revenue and profit there is essential to CEO Martin Winterkorn’s goal of surpassing Toyota Motor Corp. in size and profitability by 2018. He also wants to almost triple VW’s share of the U.S. market to 6 percent by 2018 and boost deliveries to 1 million, including 200,000 cars at the Audi luxury unit.

“The U.S. will always be one of the largest and most important markets for automobiles,” Klingler said at the briefing, reaffirming the delivery targets.

Volkswagen’s preferred shares rose 1.18 euros, or 1.3 percent, to 88.96 euros at the 5:30 p.m. close of trading in Frankfurt. The stock has gained 36 percent this year, giving the carmaker a market value of 38.4 billion euros ($49.4 billion).

VW unexpectedly named Lohscheller and Mark Barnes on June 24 to run the U.S. operations on an interim basis, saying at the time it was holding contract talks with Jacoby.

Sales Increase

In the first eight months of the year, VW boosted U.S. deliveries by 21 percent to 172,747. Jetta sales increased 6.6 percent to 76,338 cars, accounting for 44 percent of the total. Other models that posted gains included the Tiguan, Passat CC and Rabbit.

Browning will have to capitalize on VW’s $1 billion plant in Chattanooga, Tennessee, scheduled to begin production in the third quarter of 2011, and lift sales by designing more models for the U.S.

By 2013, the year the company has said its U.S. unit will return to profitability, VW wants 85 percent of vehicles sold in the U.S. to be produced in Chattanooga and in an existing factory in Puebla, Mexico, where the carmaker plans to invest as much as $1 billion over three years.

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