In a bid to recover lost sales and a forced exit from the diesel vehicle market, Volkswagen used the Santa Monica Pier as the backdrop to introduce its biggest sport-utility vehicle yet, the 2018 Volkswagen Atlas.
The Atlas will be competing in one the fastest growing segments in the U.S. auto industry. Sales of large SUVs have jumped more than 15 percent through the first nine months of this year compared with the same period last year, according to industry research firm Autodata Corp. The overall U.S. auto market is up just 0.5 percent.
Continued low gas prices and rising employment combined with improved fuel efficiency in larger vehicles have boosted the popularity of big crossovers and trucks among consumers.
“The Atlas marks a brand-new journey for Volkswagen to enter into the heart of the American market,” said Hinrich J. Woebcken, VW’s North American chief executive.
Volkswagen is unveiling the Atlas as it attempts to recover from what is considered to be the biggest fraud in the automotive industry.
Last year, the German automaker admitted to rigging diesel-powered cars between 2009 and 2015 with a device designed to cheat federal and state emissions testing. Software in the electronic controls of the vehicles changed how they operated when undergoing testing, while on the road the VWs were emitting up to 40 times the legally allowed amount of nitrogen oxide.
“Consumers tend to come back,” Stephanie Brinley, an IHS Markit analyst, told Trucks.com. “If you look at other prior recall situations, consumers can eventually be recovered. The Atlas will give [VW] access to consumers they don’t have right now.”
The 2018 Volkswagen Atlas will be large. At 198.3 inches long and 77.9 inches wide, it’s on par with Ford’s Explorer but bigger than Toyota Highlander.
“What we’re seeing is that consumers are drawn to the utility of that vehicle size,” Brinley said. “They do like to sit up a little bit higher, they do like the stuff they can put into it and over the years we’ve grown and developed the crossover and car-based utility vehicles so that they ride and handle much more smoothly than they did a decade ago.”
The new Atlas will prominently feature Volkswagen’s design DNA. It will have standard LED headlights and daytime running lights, along with optional LED taillights. Safety features will include available adaptive cruise control, forward collision alert with autonomous braking, blind spot and lane departure warnings, parking steering assist and more.
Volkswagen said it will be the only vehicle in the large SUV segment to offer an automatic post-collision braking system. These systems apply the brakes after a primary collision occurs so that residual kinetic energy is reduced.
“This is the biggest and boldest Volkswagen we have ever built in the United States, delivering the distinctive design and craftsmanship we’re known for, now with room for seven,” Woebcken said.
The third row will be easily accessible for adults via an all-new entry system. It will even work with a child seat installed in the second row.
The Volkswagen Atlas will also be available with VW’s Car-Net infotainment suite featuring Android Auto, Apple CarPlay and MirrorLink. It will have an optional 12 channel, 480-amp, and 12-speaker Fender audio system, the most advanced system Volkswagen has included in any vehicle.
The 2018 Volkswagen Atlas is slated to be built alongside the Passat sedan at the Chattanooga assembly plant in Tennessee. Volkswagen has yet to announce the pricing or EPA fuel economy information for the 2018 Atlas. It goes on sale in the spring of 2017.
The Atlas will be offered with two gas-powered engine choices. A turbocharged 2.0-liter direct-injection TSI 4-cylinder engine will be standard on the Atlas and produce 238 horsepower. A 280-horsepower 3.6-liter VR6 engine will also be available, and will be the only engine available to those looking for Volkswagen’s 4Motion all-wheel-drive system. There will be no diesel engine choice for the Atlas.
When regulators discovered Volkswagen’s test rigging last year, the company stopped selling diesel vehicles and its sales plunged. Through the first nine months of this year, VW sales have fallen almost 13 percent to about 231,000 vehicles compared with the same period a year earlier, according to Autodata.
“It’s definitely had some impact,” said Dave Sullivan, manager of product analysis at AutoPacific, an industry consulting firm. “Their sales have gone down but they’ve also lost the ability to sell diesel vehicles in the U.S. But I think Americans tend to have a very short memory when it comes to crisis in the auto industry.”
That’s been proved, he said, by how quickly consumers moved past other automaker controversies such as Toyota’s sudden unintended acceleration problems or General Motor’s defective ignition switches, which were linked to 124 deaths.
Earlier this week U.S. District Judge Charles Breyer in San Francisco approved a $14.7-billion U.S. settlement of the diesel emissions cheating scandal. VW agreed to spend $10 billion to buy back nearly 500,000 of the diesel vehicles it sold in the U.S. and spend another $4.7 billion on emissions mitigation programs — including promoting the sale of zero-emissions vehicles — and clean-emissions infrastructure.
Additionally, the company has agreed to make $1.21 billion in payments to its 652 U.S. VW brand dealers to make up for lost sales and business.
“The sooner Volkswagen can end this, the sooner that people will be able to move on,” Sullivan said.
Volkswagen is particularly weak when it comes to SUVs and crossovers, which are among the strongest segments of the U.S. auto market. To date, just 30,000 of its Tiguan compact crossover have moved off dealers’ lots this year. Honda, by comparison, has sold almost 265,000 CR-V compact crossovers.
“It’s just a sea of crossovers out there these days and they’re a dime a dozen,” Sullivan said. “There’s an opportunity for someone to come out with something fresh and different looking that could potentially give people a reason to go down a different path, and the Atlas could do that.”