VW plans to get into the electric-truck business.
Waldo Swiegers/Bloomberg
What’s old is new again—if you turn it into an electric vehicle like Volkswagen is doing.
The German automotive giant is bringing back the Scout brand and morphing the early off-roader into a line of all-electric trucks and SUVs—with the goal of wresting away the lucrative North America truck market from Ford Motor , General Motors, and Chrysler.
It’s a bold move, but it might not be the best idea or best way to allocate VW’s cash.
The Scout first came on to the scene in the early 1960s—a boxy SUV with big tires made by International Harvester. Car enthusiasts can still buy Scouts on eBay (EBAY). Volkswagen bought the brand name earlier this year.
Production on VW’s new line could start in 2026; the annual sales target would be about 250,000 vehicles.
The Scouts would go head-to-head with the electric F-150 made by Ford (F), or perhaps against a Ford Bronco, when an electric one eventually gets made, along with any other popular truck that can be used for off-roading such as a handful of Jeep models made by Chrysler parent Stellantis (STLA).
Now, the concept of a car company within a car company isn’t new. General Motors (GM) launched Saturn in the mid-1980s to help stem share loss against Japanese auto makers. That plan ultimately failed, though.
First, some history. In 1976, Toyota was selling about 2.4 million cars worldwide and GM was selling almost four times as many—about 8.6 million vehicles. Toyota commanded about 3% of the U.S. market versus GM’s 45%, according to data provider WardsAuto.
At roughly the same time, even a few years earlier, oil prices start to climb and Americans wanted more fuel-efficient autos. That was the thin end of the wedge that Toyota, Honda , and other Japanese auto makers would use to pry their way into the U.S. car market.
By the mid-1980s Toyota’s U.S. share had doubled and GM’s share was approaching 40%. That’s when Saturn entered the picture.
Saturn, though, didn’t stop the share loss. By the mid-1990s, Toyota had captured about 8% of the U.S. market and GM was down to about 30%. Around the globe, Toyota was up to about 4.7 million cars globally and GM was selling about 7.4 million.
In 2010, GM closed the Saturn division. The company within the company was a bust. The trend of Japanese auto makers selling more vehicles in the U.S. is still going strong, though. Toyota sold more cars in the U.S. than GM for the first time last year.
But the death of Saturn doesn’t doom Scout. What VW must realize is that competing in trucks is tough. Toyota knows that—even Toyota.
The Toyota Tundra was a big push in the mid-2000s. Despite all the success in cars, the Tundra never caught on. U.S. sales peaked in 2007 at about 197,000 units. In 2021, Toyota sold less than half that many Tundras—about 82,000. Ford sold more than 726,000 F-series trucks this past year.
Lower volumes mean lower profits for auto makers. The flywheel—more volume leading to better profits, better profits leading to better cars, better cars leading to more volume—that worked so well for Toyota in cars just never started spinning in trucks.
Ford CEO Jim Farley worked at Toyota when it was launching the Tundra. He told Barron’s that the Tundra was a disappointment for the Japanese auto giant.
Still, it’s impossible to say exactly how Scout will do. Selling electric trucks is a twist. VW plans to have scale in EVs. It’s spending billions of vehicle development and battery capacity. The company wants at least half of global sales to be all-electric by 2030. What’s more, the Volkswagen group of companies plan to launch 25 new EV models in the U.S. by the end of the decade.
Some of those launches will now be rugged Scout trucks and SUVs.
VW stock rose 3.5% in overseas trading Tuesday. Most markets were in the green. The S&P 500 and Dow Jones Industrial Average rose 2.8% and 2.4%, respectively.
Write to Al Root at [email protected]
