VW plots return to relevance in U.S. following diesel scandal

Volkswagen is rolling out its plan for re-selling most of the cars involved in the German automaker's diesel emissions cheating scandal.

Volkswagen brand head Herbert Diess told reporters after a board meeting at Volkswagen's lone U.S. plant in Tennessee on Thursday that the fallout from the scandal "is something we need to live with" as the company seeks to regain relevance and market share in the United States.

"The brand suffered a lot worldwide, we are suffering still," he said. "And for sure we are not through."

• Volkswagen executive enters plea deal over diesel emissions scandal

It has been more than a year since Volkswagen agreed to pay more than $20 billion US to settle criminal charges and civil claims related to the company's sale of nearly 600,000 cars with "defeat devices" designed to beat U.S. emissions tests.

The first batch of retrofitted vehicles includes new 2015 models that went unsold following the cheating revelations. Dealers who received diesels as part of Volkswagen's buyback program will get the right of first refusal for those vehicles as they enter the used market, said Hinrich J. Woebcken, head of Volkswagen Group of America.

"After that, there are several channels to remarket them in a controlled way, so they don't come all at once to the market," he said. "We want to ensure the residual (resale) values of those cars remain stable."

Higher-mileage and more heavily used vehicles will be scrapped.

The management meeting in Chattanooga comes as Volkswagen ramps up production of the new seven-seat Atlas SUV, the best example so far of the company's shift away from its small car roots and part of renewed efforts to become a volume brand in the U.S. The goal is to grow market share from below twoper cent to more than five per cent, Diess said.

"It's a long term plan, we can't win America over in two years' time," Diess said. "It's a 10-year plan, but we are committed."

To get to five per cent, VW would have to pass Lexus, Mercedes-Benz, Dodge, Ram, Subaru, GMC, Hyundai, Kia and Jeep. All of those brands had less than fiveper cent market share as of July 31.

• European car companies act as cartel & collude together, lawmakers allege
• Volkswagen emissions scandal settlement approved by courts in Ontario, Quebec

Volkswagen has confirmed it will introduce an electric version of its iconic microbus in 2022, but no decision has been made about where to build it. VW minibuses haven't been sold in the U.S. since the 1970s, but a prototype of the new version was met with great excitement when Diess showed it off in California last month.

"We have a beautiful heritage with ups and downs, and we have the dreadful history now of the past two years, which was a very difficult period for us," Diess said. "But we think that we get a second chance from the American customers."

Any additional U.S. production beyond the Atlas and the Passat sedan would be accommodated at the site of Volkswagen's existing plant in Chattanooga.

"We wouldn't need a new plant," he said. "This plant still has a lot of capacity, and we want to fill that."

• Judge orders Volkswagen to pay $2.8B US in emission scandal