Volkswagen Atlas business case builds for Australia

The Volkswagen Atlas could earn a surprise start in Australia after the sales potential of the seven-seat SUV was brought to the attention of a senior US executive.

Queried by carsales.com.au at the Los Angeles motor show this week, Volkswagen US boss Scott Keogh acknowledged Australia’s booming SUV market spurred potential to create a right-hand drive version of the Atlas, which is currently restricted to left-hook markets.

However, any plan to import Atlas would be contingent on pricing and specification of the seven-seat SUV, now the new Touareg flagship SUV is only round the corner, Volkswagen Australia says. It would also require interest from other right-hook markets including South Africa.

Currently, 85 per cent of sales volume of the US-built Volkswagen Atlas is allocated to its home market, while 15 per cent of production is exported to other left-hand drive markets including Russia.

Keogh vowed to talk to Australian stakeholders about the potential for more export opportunities.

“If there are market opportunities there for a factory, you can always find capacity,” he told carsales.com.au.

“That plant (Chattanooga in Tennessee) makes the Passat, it makes the Atlas and it will be starting up production of the new Atlas Cross Sport in the next few months.

“We’ve got a lot going on at that plant and I should find out what the opportunities are.”

Volkswagen is also expected to put the Atlas Tanoak dual-cab ute into production, but its Australian division is less excited about the monocoque-platform ‘lifestyle’ pick-up.

For the RHD Atlas SUV to work, Keogh said he would need to be assured certain volume, along with interest from Australian stakeholders.

The latter is assured; but having both would ensure the business case is viable, he said.

“I’m not the expert, but I think it’s going to be the initial development cost, and then you determine what kind of volume you can get in those markets,” he said.

“But look, the footprint of the plant is there, the heavy investment is already done and the heavy costs are there; I doubt the incremental invest is that high.

“These are all things you’ve got to run numbers on before you go do it. Right now probably wouldn’t be a good time because we’re ramping up production of the new car and we’re a bit stretched, especially since we’re making as many of the those (the Atlas) as we can. But if there’s an opportunity for it we’ll look at it.

“Heck, if we can export cars that’s good for business, then why not.

“We would need to look closely at it but we’ll discuss it, we’ll definitely discuss it.”

For its part, Volkswagen Australia points out the Atlas would complement both the mid-size Tiguan Allspace seven-seater and the large new Touareg five-seater, which arrives in showrooms from May, rather than being positioned as a bulk volume-seller like the Toyota Kluger.

“If it’s available in right-hand drive at the right sum and the right spec, we’d definitely look at it,” Volkswagen Australia communications boss Paul Pottinger said.

“We’re looking to make a pretty major announcement around SUVs. The perceived necessity from something like the Atlas has probably dipped off now the new Touareg is coming.”