Has Volkswagen's US Market Plan Failed?
Several years ago Volkswagen launched an ambitious new product strategy for the U.S. market. It has failed.
That at least is the conclusion drawn by a report in 24/7 Wall St. outlining decreased sales of three percent in the U.S. compared to the same period last year. Through September, the German automaker has sold 314,833 vehicles compared to 323,090 last year. It’s a disturbing statistic considering the rest of the American automotive market has grown over eight percent in the same period.
SEE ALSO: Volkswagen to Sell Electric Cars in the U.S. in 2015
The general perception of Volkswagen in America isn’t gleaming either according to the J.D. Power Initial Quality and Dependability Studies. In the Initial Quality Study, Volkswagen is ranked below the industry average with 120 problems per 100 vehicles – the industry average is 113 problems. In J.D. Power’s Dependability Study, Volkswagen was well below the industry average of 126 problems per 100 vehicles with owners reporting an average of 174 problems.
A major issue with Volkswagen’s plan in America is its lack of diversity in its models. The German automaker’s current lineup in America consists of three sedans, two compacts and two SUV models. It’ll be interesting to see how Volkswagen continues to push in the world’s second largest car market as it strives to become the world’s largest automaker.
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[Source: 24/7 Wall St]
Discuss this story at VWForum.com
Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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There are really 2 things working against VW. Their dependability, which has been discussed here at length, and their insistence on brand division. If VW wants to be competitive they need desperately to deal with this reliability issue. Then they need to work on making their cars better. Make the base models all about mileage (bring over the 1.6L from Europe where they get 40+mpg). Make the midrange about handling. And give the GLI's and GTI's world beating power and handling. And offer something more. Offer a VW badged de-optioned RS6 AWD world beater that the masses can afford. If I had to guess, I think much of VW's problem stems from Audi or the limitations placed on them by Audi. They think they can't make the cars handle too well or have too much power. AWD on a inexpensive VW? Can't happen. All because it might cut into Audi's market. But this is what happens when you try to have a premium line that covers such a wide range from performance to luxury. Compare them to GM. Chevy has the full range of performance cars as does Cadillac. The difference lies in the level of luxury. The mistake VW/Audi is making is in trying to make the difference one of performance and luxury. Brand identity is crucial. And right now VW is in serious danger of it's cars being labeled as boring when compared to the vastly improved competition.
I have bought 3 VWs, a 2002 GTI VR6, a 2007 Jetta Wolfsburg and 2010 Tiguan Wolfsburg. With that said..I now own an Audi A4. I think what the issue was..when it came to replace my Jetta when it was totaled it was obvious that they downgraded the car to Camery level..and not the "almost BMW" level it once held. Everything about it was just cheaper..little things like no carpet on the trunk lid, no air-conditioned glove compartment, cheap hard plastic dashboard instead of soft touch. I just felt ripped off. My mom was in the market for a small SUV and looked at the Tiguan, as she liked the one my Ex had bought..the new updated one is uglier..and more expensive reaching upwards of $30k+, putting it in competition with the BMW X1. VW seems somewhat Schizophrenic these days, not sure if it wants to be premium, or bargain. It used to be known in the 80's as a cheap European car..and then the early '00s as "premium for not a premium price". I found the new cars are expensive to buy, expensive to repair, and underwhelming stylewise. I figured I might as well get an Audi A4, as I was going to spend as much..and now I have everything I wanted. The traditional VW buyer isn't going to buy a Huyndai or Camery..they want something nicer. Hyundai and Toyota buyers don't buy VW because they are afraid of repair costs. VW needs to find it's core again..either make boring cheap cars, or make fun affordable premium cars, but they can't do both.