VW will continue to offer the Passat in the U.S., but it is developing larger models tailored for American customers and driving conditions, Jacoby said at the Paris car show. 'A lot of the specifications of the Passat are made for Autobahn necessities,' he said, referring to Germany's high-speed motorways. He said VW isn't pulling features, but does plan to tailor the Passat more to American tastes. Jacoby estimates that VW will be able to sell between 130,000 and 150,000 mid-size cars and an equal number of compacts annually. By comparison, it sold 37,182 Passats and 98,951 Jettas in the United States last year, according to Autodata Corp. VW's U.S. sales peaked in 1970 at 570,000 vehicles, when it was offering the original Beetle, a sturdy and affordable car. But its U.S. sales went into decline, sinking to as low as 49,000 in 1993, as Japanese automakers established themselves in the U.S. car market. Last year, Volkswagen sold about 330,000 VW-badged vehicles in the United States, and it has been losing money in the U.S. for more than five years. But VW has set ambitious growth targets as part of a plan to sell 6.6 million VW-brand vehicles worldwide by 2018. By that time, the company aims to have more than doubled U.S. sales of VW-brand cars to 800,000. 'You have to make up your mind if you want to be a real player in a market or if you want to be in a niche,' said VW spokesman Andreas Meurer. 'At the moment, we are in a niche' in the U.S., he said, though Volkswagen is a leader in Europe, China and other regions. VW reaffirmed its commitment to the American market this year when it announced plans to build a factory in Chattanooga, Tenn. It will produce the mid-size car at the plant starting in 2011, and the smaller car that would probably be called a Jetta at its Mexican plant in Puebla beginning in 2010. Volkswagen may produce the next-generation Tiguan small SUV in North America as well, Jacoby said. VW's plan sounds promising, said Michael Robinet, vice president of global forecasting at Northville-based CSM Worldwide. With its new cars, it will be competing 'where the core of the market is,' he said. 'I think they're good on execution,' Robinet said about VW. 'The real issue is how competitive they can be on a cost basis.' Jacoby said the new cars would be developed using existing platforms and modules. The company is still assessing its plans, however, because of the dramatic changes in the U.S. market. Like many other automakers, Volkswagen is considering bringing a subcompact to the market. 'We could imagine having a car like the Polo in the United States,' Jacoby said, referring to the model that is a smaller version of the VW Rabbit hatchback. He said VW would probably make a decision within a year. A power struggle taking place at the company's top levels is not expected to affect VW's U.S. strategy, Jacoby said. Porsche AG, VW's largest shareholder, and the state of Lower Saxony, where VW is headquartered, are vying for control of the automaker. Jacoby said the strategy had been approved by Volkswagen's supervisory board, where both shareholders are represented, and that it has Porsche's backing. You can reach Christine Tierney at (313) 222-1463 or ctierneydteom.