• by Karl Greenberg , November 16, 2009

Volkswagen Group is going Bauhaus. The Herndon, Va.-based U.S. sales arm for Audi and Volkswagen brands is planning a national retail revamp of dealerships that turn retail into minimalist art spaces. The group's new $125 million Audi and Volkswagen dealerships in New York City will be the first to benefit from the national retail revamp.

Actually, the New York showroom will be a new dealership for the group, as Volkswagen and Audi will be ensconced in a space vacated by General Motors. The 265,000-square-foot former Potamkin General Motors dealership is on 11th Avenue, Manhattan's auto alley.

The new dealerships, owned by Open Road Auto Group, will evince a retail design direction the automaker will take nationwide, which it is calling "white frame" and "terminal" for Volkswagen and Audi, respectively. The dealerships will aim to start sales early next year.

A spokesperson for the Volkswagen brand says the White Frame concept, which was developed for Volkswagen by Novi, Mich.-based CityScape Architects, Inc., "is easier to adapt to building retrofits and multi-story buildings. Volkswagen dealers who currently have our existing 'marketing place' design are not required to convert to the new design as the two were designed to complement one another."

The spokesperson says Volkswagen does not plan to significantly increase the number of dealerships in the U.S. as part of the retail strategy. Also, Volkswagen will not require dealerships that are currently based on the "Marketplace" design to convert to the new showroom look. Rather, the two will co-exist in the U.S. market, per the spokesperson.

"Any new dealer who joins the brand, or any existing dealer who is not in a facility based on the current design but wants to upgrade, will be required to build it with the White Frame design. Any such construction is at the dealer's expense," says the spokesperson. The company, which has about 800 dealers in the U.S., is aiming to sell one million cars in the country by 2018.

Volkswagen reported sales of 17,037 total units, representing a 7.2% rise over October 2008. It sold 9,076 Jetta cars -- the company's top seller in the U.S. -- for a 25% increase versus the month last year. The company's diesel-powered Jetta TDI accounted for 40% of total Jetta sedan and SportWagen sales. The division's luxury sibling Audi posted October sales of 7,358 cars and SUVs, which the company says approached its all-time U.S. October sales record of 7,443 vehicles a year ago.

Audi will continue its new-product momentum later this month with the launch of the Audi A3 TDI. This model will revolutionize fuel efficiency in the luxury segment by achieving 42 mpg in highway driving, according to the U.S. Environmental Protection Agency. That's a fuel economy rating unmatched by all other luxury models.