‘We Don’t Just Want To Sell SUVs’ Says CEO Of Carmaker That Sells 80% SUVs

It’s easy to imagine a version of Volkswagen that’s very successful in the United States. The brand could have been a player in the hybrid space, it could have had a van that wasn’t three years too late, and it could have been the affordable choice. It’s barely any of those, though the new CEO wants to fix that.

The biggest problem Volkswagen has now, other than tariffs, is a product issue. It has the wrong products for the market. It’s not alone in this, and there’s a version of the future where 2025 represents the bottom for the company. The Morning Dump is on the second round of quarterly sales dumps, and I’ll go from an automaker that sells 80% SUVs and is having a rough time to Ineos, an automaker that sells 100% SUVs and is maybe doing alright.

Of all the European V automakers, there’s an open question of whether you’d want to be a Volvo or a Volkswagen dealer as both have had a rough go of it lately. I guess Vauxhall would be a bigger challenge. Is Toyota next? The automaker has a lot of EVs coming out; is that a good idea or a bad idea?

VW Needs To Do More In The United States

Sales were down 16.1% year-over-year in the first quarter for Volkswagen in the US, and it’s spread across most of the brand’s few offerings. Most pronounced is the now-dead ID.4 at a 95.6% drop, although don’t sleep on the 40.8% decline for the Taos. The two cars that did better were the Tiguan, which was up 55.2%, and the Golf R, up 4.7%.

The one caveat for all sales last March is that there was some tariff fear probably driving an increase in sales for automakers like Volkswagen — automakers that more susceptible to trade barriers. Is that enough to drive a 16.1% decline? I’m not so sure.

In a bit of good timing, Mark Phelan over at the Detroit Free Press has an interview with VW of America CEO Kjell Gruner, who sees potential upside for the brand if it can make some changes.

“VW’s roots in the United States were in the counter culture,” Gruner said. “In Europe it was the establishment brand.

“In the U.S. this is an unconventional brand.”

I agree with Mark that this is a nice turnaround in viewpoint from the Beigekrieg era when the company tried to out-Toyota Toyota’s worst period and just build a bunch of bland cars. More recently, VW has gone from the Dieselgate disaster to its similarly disastrous response in the form of a bunch of electric cars that were pretty mid. What does the future hold?

There are some other interesting tidbits in here, including that the ID.Buzz will be back by the end of the year when it resolves its seating issue. The UAW also requires VW to build something in Chattanooga, which means that something is going to be built there. A new EV? Maybe. Here’s what struck me from this interview, though:

“We don’t want to sell just SUVs,” Gruner said, despite the fact that they account for 80% of VW U.S. sales.

The sporty GTI compact “is very important — a brand shaper” despite low sales. The GTI and the more powerful and expensive Golf R both reinforce VW’s dare-to-be-different heritage.

This is the good stuff. Right? I want more of this. I want affordable cars and Volkswagen is right for it. If there was ever a time to bring back the Beetle has a hybrid and EV duo that costs $22,000 and looks cool the time is now, right? Imagine how happy American politicians would be if VW built a new Beetle in America and sold it to the world. A win-win-win.

Ineos Is Maybe The First Automaker I’ve Seen Brag About Fleet Sales

David is a big fan of the Ineos Grenadier, and I’m always going to take his word for it when it comes to the off-road capability of a vehicle. I have to admit that they look excellent. The new company also set a global sales record in Q1, up 20% year-over-year, and a big part of that is fleet sales according to the company’s press release:

Fleet orders in Q1 2026 came from all four corners of the globe and from a wide variety of organisations with different use cases. Examples include the Kenyan Red Cross, Hertz rent-a- car in the North America, and fire and rescue services in Germany, Spain and France.

“The Grenadier has proven itself as a highly capable, durable and reliable 4X4. Not only is that continuing to appeal to new retail buyers around the world, but fleets – which are always cautious about new manufacturers – now have the confidence to start placing big orders,” adds Mike Whittington – Chief Commercial Officer, INEOS Automotive.

What’s amusing about this is that most automakers tend to not brag about fleet sales, as those usually mean the company is dumping products it’s not able to sell on the larger market. It’s not that fleet sales are necessarily bad, but it’s a lower-margin business.

For Ineos, it’s a different story. The company needs people to know what an Ineos actually is, and seeing it as a police car or rescue vehicle is a way to do that. The brand needs legitimacy and it’s a smart way to do it.

Volvo Dealers Would Love To Not Get Stuck With A Bunch Of Cars

Volvo sold just 22,651 vehicles in the United States in Q1, down 32% year-over-year. That’s not good. Here’s how Volvo is explaining that:

“While the first quarter presented challenges, we are seeing strong momentum heading into Q2 and our focus remains firmly on meeting the needs of our customers in a dynamic market, with a diverse portfolio of powertrain options – MHEV, PHEV and BEV,” said Luis Rezende, President, Volvo Car Americas. “We are excited to welcome the EX60 to our lineup later this year, which will contribute to volumes and deliver on what matters most to our customers when considering an electric vehicle: range, charging speed, and price. We expect the EX60 to be a gamechanger for Volvo Cars and industry and are confident it will bring new customers to the brand.”

And, per Automotive News, here’s how dealers feel about it:

Volvo ended the first quarter with 93 days’ worth of inventory, according to Edmunds, well above the industry average of 65 days and worse than the 81-day supply it had a year ago.

One Volvo dealer sitting on a six-month supply described intense wholesale pressure from the factory.

“They don’t care about building value in the brand or raising transaction prices — it’s just ‘take more cars,’” said the dealer, who asked not to be identified to avoid jeopardizing his relationship with the brand.

Bring back more wagons. This is always my advice.

Is Toyota Doing The Right Thing?

Few outlets have given Toyota as much praise for not going so heavily into EVs as we have. That doesn’t mean I don’t think Toyota’s plan to introduce more EVs now is a bad idea. The brand is seeing growth, and there’s obviously still some demand for electric cars that will, eventually grow. I even think that the new Highlander going EV-only makes sense given the Grand Highlander exists.

As Hans Greimel points out, this is actually less of a risky strategy for Toyota given its global reach:

Toyota marshals global scale by leveraging the same platforms, supply chains and technologies across Japan, Europe, North America and, even to some extent, China.

Ford, GM and Honda simply don’t have such global reach, let alone such raw volume.

Moreover, Toyota can spread the cost across EVs developed and produced with partners.

The Toyota bZ Woodland, for example, is built by Subaru in Japan and is a sibling to the nearly identical Subaru Trailseeker. The Subaru Getaway, a new three-row EV arriving at dealerships this fall, is a stablemate of the Toyota Highlander, and both are built in the U.S.

GM is maybe the only other automaker that’s close, given GM South Korea and the company’s partnerships in China.

What I’m Listening To While Writing TMD

Los Angeles in the ’70s seems like a lot of fun, especially if you like nose candy. Here’s local ladies group “The Runaways” with Cherry Bomb.

The Big Question

What should VW build next in the United States?

Top photo: VW