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The company is also working on redesigning its midsize and compact cars to cater to the mainstream U.S. car buyers.  The idea is to produce more cars in North America just like the Japan carmakers do and price them as competitively, to attract mainstream buyers.

Once upon a time, when Volkswagen was a major player in the U.S. and sold almost 570,000 vehicles, the Japanese were small.  But the Japanese worked smart and redefined car segments, created models keeping in mind American customers, making sure they offer quality at a cheaper cost.  This left Volkswagen behind and in spite of having a set of loyal customers in the U.S., the sales shrunk because of price comparison.

Volkswagen made several unsuccessful attempts to increase its significantly reduced market share of around 2-3 percent.  But this time around, the good news is that dealers and analysts are showing optimism; especially confident that a lower price will do the trick.

A dealer in Louisiana says, “It appears now that we’re going to be priced as close to our Japanese competitors as we ever have been, we can now compete head-on.”

Analysts say that Volkswagen may have an edge over the others because its cars having broader appeal.

Volkswagen has given itself until 2018 to regain its lost glory and become the world’s biggest carmaker.

VW is bringing out Jetta compact by 2011, which will cost $16,000.  Another new midsize car that will be replacing Passat sedan and Wagon will be much more spacious and cost thousands less. It is expected to be priced around $20,000, which is the same starting price as the Toyoto Camry, the much-wanted car in the midsize segment.

Image jonathan.broderick

Production of the mid-segment cars in the new plant in Tennessee is expected to start next year.  Volkswagen is also developing a zero-emission electric car that will be out in the United States in 2013.

Even with all that in the works, it is left to be seen how far Volkswagen succeeds in its plan, as the other carmakers like Ford Motors are not sitting quiet either.  Most automakers are targeting the mid-segment with new and competitively priced models.