March 4 (Reuters) - Volkswagen's new Scout

Motors brand has taken more than 160,000 reservations for its

first model, with most customers opting for an extended-range

hybrid version instead of full electric, a top executive said on

Wednesday.

Scout will begin building prototype models this year at a

plant the automaker is constructing in South Carolina, Scout CEO

Scott Keogh said at an Automotive Press Association event in

Detroit.

Of the 160,000 reservations, 87% are for a so-called

extended-range EV, or EREV, a version of the rugged Scout

models, reflecting the dimmer outlook for fully electric

vehicles in the U.S. An EREV uses a small gas engine that serves

as a generator to recharge the vehicle's large battery on the

go.

VW introduced Scout as a fully electric brand in 2022, but

reversed course to add EREVs a few years later, as U.S. EV sales

growth was decelerating.

Scout previously said it would start production in 2027,

though recent media reports have said the rollout has been

delayed because of technical challenges. Keogh said on Wednesday

he expects products to be in customer hands by 2028.

Volkswagen is hoping the Scout brand will help it grow market

share in the truck-and-SUV-heavy U.S. market, where the German

automaker has long struggled to make inroads despite being among

the world's largest car companies. VW ranked 11th in U.S.

vehicle sales last year, behind Tesla, according to

research firm Motor Intelligence.

On Tuesday, two Volkswagen dealers in the U.S. sued the

company over its decision to sell Scout vehicles directly to

consumers, claiming that breaches the automaker's contract with

its retailers. The lawsuit is seeking class-action status.

A VW spokesperson said the company does not comment on

active litigation.

Keogh said the direct-to-consumer model "made the most

sense, without a doubt," when looking at the American market.

(Reporting by Kalea Hall in Detroit; Editing by Mike Colias and

Emelia Sithole-Matarise)