Volkswagen Scout: Magna Collaboration and U.S. Production
Since its announcement in May 2022, Volkswagen’s plans for its revived Scout brand have undergone significant changes. Initially, the German automaker intended to design, engineer, and manufacture the Scout vehicles entirely within the United States. However, recent developments suggest a different trajectory.
Magna’s Role in Scout’s Development
Reports indicate that Volkswagen is collaborating with Magna International, a Canadian automotive supplier. Specifically, Magna-Steyr, Magna’s Austrian subsidiary, has signed a €450 million agreement to develop the battery-electric pickup and SUV slated for release in 2026. This raises crucial questions about the extent of U.S.-based production for the Scout brand.
Volkswagen to Maintain Manufacturing in the U.S.
Volkswagen will still be responsible for manufacturing the Scout brand despite Magna’s involvement in its development. According to reports, Magna was initially supposed to take over assembly in the U.S., but that arrangement fell through. Instead, VW will build the Scout and construct a new production facility in Columbia, South Carolina. The state has provided VW with a significant incentive package worth $1.3 billion, which includes a provision that requires the automaker to repay $790 million if it fails to meet specific job and investment commitments. VW’s new facility in Blythewood, SC, is expected to play a critical role in VW’s plans to produce the Scout brand for American customers.
Magna’s Expertise in EV and Off-Road Vehicles
Magna possesses extensive experience in internal combustion engine (ICE) and electric vehicle (EV) truck manufacturing. The company has a proven track record, having built the iconic Mercedes-Benz G-Class and being responsible for the upcoming battery-electric Mercedes EQG. Additionally, Magna has assembled the Jaguar I-Pace and developed the platform for the Fisker Ocean.
A Common Practice in the Automotive Industry
The division of development and production responsibilities between automakers and suppliers like Magna is a common industry practice. This collaborative approach has been demonstrated in successful projects like the Ineos Grenadier, which Magna helped develop while Ineos handles manufacturing.
Benefits of U.S. Production
By manufacturing the Scout vehicles in the U.S., Volkswagen can avoid the 25 percent “Chicken Tax” imposed on imported pickups and cargo vans. This strategic move ensures cost-competitiveness for the Scout brand in the American market.
The Future of the Scout Brand
The Scout brand is poised to launch with an SUV priced around $40,000 MSRP (Plus destination fee), followed by a pickup truck comparable in size to the Ford F-150. While the initial teaser image provided a glimpse into the upcoming vehicles, the appointment of Chris Benjamin as Head of Design in May 2023 suggests an evolving design direction. Benjamin has 25 years of experience in the auto industry, including six years at Stellantis overseeing interior design for Chrysler, Dodge, Jeep, and Ram. With his expertise, the Scout brand will likely prioritize form and function in its upcoming vehicles.
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