New Era for VW Heralded

December 13, 2001

Sacramento - German Chancellor Gerhard Schroeder was in attendance on Tuesday, as was Dresden's Staatskapelle orchestra and hundreds of European auto industry executives and media representatives. The occasion was the opening of Volkswagen's first luxury car assembly plant and the point from which the company will compete with German rivals BMW and Mercedes Benz. Completion of the plant is a crowning achievement for Ferdinand Piech, who will retire as CEO next spring just about the same time a new sedan equipped with VW's new 12-cylinder engine will come off the production line.

Also planned for assembly at the new plant is an SUV, the one that Porsche has collaborated with VW for design and construction and slated to be introduced as the Cayenne.

But aside from its prestigious cooperation with Porsche, VW is looking to build its own prestige with this new plant that will employ 800 highly trained employees. In his opening remarks, Ferdinand Piech said the plant will lend the VW brand identity a new dimension. "At the center of our efforts is the fulfillment of an uncompromising promise of quality."

As much as Piech has had to do with establishing the plant and developing luxury brands, it will be his successor Bernd Piechetsrieder, the former boss at BMW, who will carry the effort forward when he takes over the top VW position in April.

The plant according to European sources has received more than $65 million in German state aid because of its location in a depressed, former communist region. Numerous suppliers are already locating their plants in the area and it's hoped that the plant will help to revitalize the region. Output for the plant initially will be 37,500 vehicles a year.