My first car was a 1989 Passat station wagon. The Passat fully embodied the literal translation of the company’s name: the people’s car. It was reasonably priced, cheap to maintain and mechanically robust. The interior was roomy and practical. Compare it to today’s expensive, unreliable and over-plush Passat and you’ll know why the German automaker is in trouble. Volkswagen has lost their natural place in the market, a spot originally staked-out by Adolph Hitler.
In January 1933, twelve days after Hitler became German Chancellor, Austria’s native son announced that the German people would get a car that could travel at 60mph, fit four people and cost less than 1000 Reichsmarks. The next year, Ferdinand Porsche designed a prototype.
Production of the KdF-Wagen (KdF for “Kraft durch Freude” or “Strength through Joy”) began in 1939, the same year Germany invaded Poland. Germany’s pressing and ongoing need for military vehicles brought manufacture of the “people’s car” to an abrupt halt.
After the war, occupying British forces initially moved to sell the Wolfsburg factory. (Ford and Humber were amongst the potential buyers.) Then the Brits decided to restart production of the Beetle (as the KdF-Wagen had been rechristened). When the key players bailed, the government of the federal state of Lower Saxony stepped in.
The Beetle turned out to be the most successful car design in human history, with over 21 million examples sold. VW began exporting the Beetle around the globe, from Thailand to Sri Lanka to Nigeria to the United States of America. By 1970, the car Henry Ford II called "a little shitbox" racked-up enough sales (569,696) to become America’s top selling foreign car.
Even at the height of its success, Volkswagen was in trouble. It had put most of its eggs in a Beetle shaped basket, which was rapidly losing ground to Japanese and American-financed competition. Facing floundering finances, Volkswagen flirted with a Daimler-Benz merger. Instead, in 1964, VW bought Auto Union (later renamed Audi) from Daimler-Benz, and saved itself from ruin.
Auto Union possessed mission critical state-of-the-art technology for new models, including front wheel-drive and water-cooled engines. Initially, VW found a measure of success by lightly re-engineering Audi vehicles. In 1974, the company broke the mold with the Golf, a stunning worldwide success. Despite the innovation, the company continued to see inter-brand platform and parts sharing as the key to corporate success.
VW Chairman Carl Hahn put the theory to the test. In the late 80’s, Volkswagen bought controlling interest in Spain’s SEAT and Eastern Europe’s Skoda brands, and began slipping Volkswagen Audi Group platforms underneath new sheetmetal. Unfortunately, at the same time, VW became a victim of sister Audi’s success. As Ingolstadt’s finest took on BMW and Mercedes, VW moved into Audi’s traditional middle market, leaving lower cost SEAT and Skoda to fight it out at the budget end of the business.
Although it’s easy to see how German labor unions’ stranglehold on Wolfsburg left VW management little choice, mid-market was the worst possible place to position “the people’s car.” VW faced threats from Asian economy brands reaching upwards and German luxury brands (including Audi) reaching downwards– not to mention American and other brands fighting for its [new] target demographic.
At the same time, over-expansion and bad management were destroying the brand’s core value: bulletproof build quality. As VW's market share evaporated, rigid labor agreements forced the company’s German operations to crank out cars that couldn’t generate life sustaining margins. In a desperate move to cut the glut, Volkswagen agreed to a 28-hour work week– without significant wage reductions.
All these decisions culminated in a single vehicle: The Golf Mk V. Although it’s a fine automobile, the Golf’s latest incarnation is simply too expensive– both in terms of labor costs and manufacturing complexity– to rescue the brand’s declining fortunes. Volkswagen sells plenty of the new, German-made Golfs, but it doesn’t make a single Euro on any of them.
On the positive side, VW’s management has finally realized that it can’t change its image OR charge more money than the competition (which includes Audi). Which still leaves Volkswagen tied-up in a Gordian knot.
If Volkswagen wants to resurrect its reputation for engineering excellence and driving satisfaction– at a price point below Audi– it must do so outside of Germany (i.e. The People’s Republic of China) or find a way to dramatically reduce its labor costs inside Germany. The unions’ political power makes both options largely untenable.
The company’s only hope: Porsche’s move to overthrow the local government’s lock on majority ownership of VW. But even if the unions’ stranglehold can be broken, it still looks like the future of the brand started by a fascist dictator lies outside Europe, in a country run by a military dictatorship.
Interesting Article! I wonder what they’re thinking building the new small Audi on the Golf platform? Maybe trying to make some money from the platform? Are they trying to compete with the BMW 1er (1 series)? Will they ship it to the US?
Porsche may save them from the gov. and politics, but the climate in Lower Saxony is pretty rough these days. Most of the newspapers over here discuss the bad feelings Lower Saxony now has for Porsche. The reason Porsche is moving in is to secure their parts supply chain. VW supplies LOTS of parts to Porsche…from small components to full body-in-whites. The aim of the Porsche ‘take-over’ may change, but I really think Wiedeking is just concerned with keeping the parts supply alive, and to continue to make Porsche the most profitable auto company in the world.
hmmmm. I think, VW has done a great job lately, and the new passat is outstanding. superb finish, texture, reserved , yet elegant design. phaeton is an excellent car too. far more professionally built than any bmw. there are no tech or design glitches, that are characteristic for bmw, mercedes( and were on audi and porsche). new golf might be good, except it looks too golf -boring, while the interior is top notch. while under VW, seat has been given unique exteriors, that were not copycats like big2.5 have been doing it since inception. also skoda, that noone would have expected quality from, offers higher fit and finish than any caddy or lincoln so far. and there is no sin sharing platforms , unless you save bucks on rebadging and leaving the same exterior. audi , is excellent today, of course sedans look a bit stagnant and more expensive than modern in their exteriors, but still superb shine in fit and finish.touareg is a nice car as well, and porsche regrilled it , updated the interior and made the interior look more amateur,and tuning styled. if porsche had a serious engineering capacity, they would have designed SUV themselves, not taken from some `shoddy` VW.VW is on right track. only theys huld learn more from innovative designs, learn from japanese, and stop making cars like tasteless-corrado-golf mutations.Vw- by far the most powerful engineering company of cars in germany( vw-audi-seat-skoda). well done. lunatics2inbox.lv Latvia
An interesting side-story is how NSU got purchased by Volkswagen and merged into Audi, the NSU Ro80 was a fascinating car (and part of what brought down the NSU marque for ever), but the car I’m thinking of was the FIRST water cooled “Volkswagen” (never sold in North America, however).
The car was engineered as the NSU K70 starting in 1967 (K for “conventional” as opposted to R for “rotary” engine). It vaguely resembles a
Volvo 144, but is about 30 years ahead of Volvo’s engineering!
Take a look for yourself. With this automobile, Volkswagen moved from 1939 tech to 1980 tech, in 1970 when the car was itroduced. It was too large a leap, and ended up a dead-end.
http://web.telia.com/~u31614134/eK70.html
Inboard front disc brakes. Three hydraulic brake circuits – not just two as required by law. All independent suspension. Front wheel drive. Rack and pinion steering. Crush zones front and rear. Massive 24 cubic foot trunk (a “4 bodies” trunk for the Mafiosa…). Huge interior room for five. All alloy (in NSU original specification, cast iron block in VW reality) hemi-head single overhead camshaft engine. Highly unique front wheel drive transaxle behind the engine, situated north-south instead of transversely east-west, to allow better serviceability.
These are basic “specs” which could make a 2008 model from virtually any auto manufacturer proud. Remember, this car was introduced in 1970.
time for VAG Deathwatch?
I’ve never liked Volkswagens (overpriced, expensive to fix, patchy dealer network) but they do impress me on their design. I have also noticed that while many people desire a VW many opt for their second or third choice (usually a Honda or Mazda) instead. Usually, that means that getting into a VW is too expensive.
The article doesn’t quite come out and say it but I would think that one of the key reasons VW is still around as a global player is the fact that it is owned by a government. I wonder how many millions or billions the state of Saxony (and by extension Germany) has poured into VW to keep jobs intact and factories running over the years?
The key single problem I see with VW today–which may be fine for business, at least in the short run–is that they are clearly marginalizing their enthusiast customer base in order to cater to the whitebread mid-market.
This presents two sub-problems: First, enthusiasts are opinionmakers and have a lot of sway in the market. By making all of their new cars unnecessarily larger and more complex, they are fundamentally undermining the performance options. You can only boost power to compensate for excess weight up to a point, then you’ve just got a straight-line muscle car.
Second, the ensuing price creep (from excess features) gets out of hand and puts the company in that mid-market danger zone. It’s hard to make a case for a $37k Passat 3.6 when you’ve got so many other great contenders in that price range–notably the G35.
Smaller, cheaper, tuner-ready platforms are the way to go. But like I said, with the current overcontenting and bland/uncharacteristic styling, they’ll do really well in the market for the next few years. I doubt it will last long, though.
I should probably disclose that my daily driver for the past 6 years is a 1998 Passat 2.8. It’s been very reliable as European cars go, and very fun to drive for this class of car. The aftermarket is decent and basic DIY maintenance is not terribly difficult (though sometimes I swear the engineers have pure contempt for the mechanics). However, I would not buy a single car VW is selling today. The dealers are among THE worst in the US, and even the independent mechanics are on the high side of reasonable. Retail parts prices are ridiculous, and not getting any better over time. It’s a fine car if you do your own maintenance research and a lot of DIY, but for most people, it would simply be way too expensive to own (if you pay for all service).
By the way, just briefly back to the past – future design of the K70.
http://en.wikipedia.org/wiki/Volkswagen_K70
Notice the weight? No more than 2340 pounds for a car on a 106″ wheelbase, 176″ long, with a huge trunk, and room for five (or maybe four corn-fed 21st century people).
Now add no more than 100 pounds for all the air bags and other assorted paraphenalia, and this begs the question – why does the modern equivalent Passat weigh in at 3576 pounds and thus requires 3.6 liters of V6 to haul it’s not inconsiderable (m)ASS around when 1.8 liters did just fine in the K70.
Oh yeah. We have to have air conditioning, power seats, power windows, power door locks (which weigh almost nothing and are a safety feature, I grant you), heated and cooled seats with vibrators for all I know.
Perhaps for every “luxury” adding mass, the engineers need to take out the same amount of weight from the body.
Look at how the aluminum bodyshell Audi A1 did (discontinued about 2 years ago). It was highly efficient and light.
Can’t think of a current product in VW’s line up I’d be interested in buying. Can’t think of anything in VW’s line up that you couldn’t get for less from another manufacturer for similar quality and probably better reliability. VW is in a similar position to GM in regards to high cost per unit so until they can outsource most of their labor to Mexico and China they just can’t reduce the cost enough to be attractive.
Case in point the VW Eos. Not a bad car but if you get the V6 and a few options you at 37-38k for a Volkswagen! Even though it’s not a hardtop the Audi A4 would be better at that point. Not to mention you will probably be able to get a BMW 135i cabrio for about that in a year or two if not less(which will have a lot more power, better handling and better resale value).
The one place VW could shine is bringing diesel to the Jetta, Passat and Rabbit/Golf. With fuel prices continuing to go up it would be nice to have an alternative to a hybrid and VW is the only one to put a TDI in the market below a luxury marquee.
Steve_S,
As part of VW’s deal with DCX, they should have 50-state diesels for MY08, according to the last blurb I read. They will be Bluetec, but marketed as “tdi” for legacy’s sake. But the downside to that is that several other manufacturers (including Honda) will have their diesels ready shortly thereafter, so first-to-market advantage will be very short-lived.
at least vw is designed and engineered in germany, by a german company on a german built platform. you couldn`t say that about most of american cars which either are not american or not cars. germans don`t simulate car manufacturing slapping saturn logos on opels. deathwatch for vw? never ever. their finish is gapless, model range overhauled,new engines added, material texture- expensive. they go the gjapanese way- the pursuit of perfection, even if that pursuit is not outfit wise. how come there are no saturns or mercurys with unique sheetmetal, but a small czech skoda gets it from vw. and seat gets it. only where there are american companies, there is no engineering, just hectic business making and willingness to avoid any elbow grease or engineering.there are 4 phases. 1. you rebadge your own products. 2. you use foreign platforms for your cars, yet not sheetmetal. 3. you completely rebadge a foreign car. 4. you file chapter11, and become a soda or a napkin manufacturer at best case, or die selling your brand name to a company in swaziland.
As much as I love VW and enjoyed our Passat. The dealer network is really the problem here. Aftermarket parts are also really expensive. I drove into our garage and bent back a piece of trim. I picked it up at the dealer (couldn’t find a better price online) for $75.00. It was maybe 2 feet long and felt thinner than an aluminum can. I installed it in less than 5 minutes.
I understand that dealers and VW have to make a profit, but this is the kind of stuff that drives me crazy. How many millions of Passats are there? Furthermore, most likely this piece was also used on millions of Audis (it was stamped Audi), Jettas, Golfs etc… Its not just VW, but you add the terrible dealer service to high price pasts
K.
I refuse to buy a Volkswagen products since 1977 when I had a then six-year-old 411 automatic blow up the transmission on me. I was a low-paid Airman overseas (England) and was still paying for the car when they hauled it for scrap, and ended up “car-less” for over a year, stuck having to pay for a blow-up car AND pay for taxis. I simply cannot bring myself to darken their dealership doorway.
Interestingly, the “reliability” of Volkswagen products is quite abysmal even today, especially when compared to the reliable two, Toyota and Honda, which are essentially kicking VW’s butt in the marketplace in North America. Look at VW’s sales in 1970 versus today for the big picture, here.
Just wait until Honda start selling diesels. Then, there will be no real reason to visit a VW store. Look for Hyundai to also get on this diesel bandwagon (per rumors I’ve seen in writing on the net), they already do sell diesels elsewhere in the world (this includes Kia).
I did finally break down and bought an Audi 5000 once and while it was a pretty nice car, it continually broke down and cost me a small fortune. Nope, no VW-Audi’s for me. Ever.
It’s got to be embarrassing for VW to know that Skoda – once the butt of continual jokes in the UK – now can manufacture automobiles in the Czech Republic using VW technology, which end up with better reliability than the German counterparts or Mexican or Brazilian VWs, for that matter! At lower cost, and at a profit, as well!
Maybe Volkswagen should go Czech out Skoda to find what they are doing right and do same?! Wow, it’s not brain surgery, guys!
If all else fails, they could slap VW badges on Skodas and sell them in the US (?)
Thomas,
What a great read — history and business lesson in just 800 words.
One point you make which I would expand on is the idea that the middle is a tough place to compete. In US retailing, Neiman Marcus at the high end and Walmart at the low do fine, but the ones in the middle, like Sears and Montgomery Ward have been failing.
In carmaking, mass market brands like Toyota, Hyundai, Honda, even Ford and Chevy are survivors. Luxury brands like BMW, Lexus and MB are safe too. But the middle is a tough place – Mercury, Oldsmobile, Buick, Chrysler, Saab have been having a tough time.
Going forward, I think Volvo, Acura and Audi will be challenged to define themselves as one or the other. They face competition from well optioned Camrys and Accords but lack the brand cachet to go head-to-head with BMW/Lexus/M-B and retain sales.
The key for them, I think, will be to capture a unique niche, as Jeep has done (and risks losing with the Patriot)where price is not the first buying criteria.
Glenn A.,
I proposed on another forum that VW should bring either Skoda or Seat to the US and market them as Toyota does with Scion–the true $12k-$18k entry-level cars with lots of customization; recapture the youth market they seem to have given up on. WHY vee-dub is straddling the $15k-$40k range (was up to $100k!) range with a single brand seems a little dubious in the current competitive environment.
I love the Passat wagon. If you don’t get all uppity with the options (XM, sunroof and seat warmers are all I need….), they price out very reasonably.
“WHY vee-dub is straddling the $15k-$40k range (was up to $100k!) range with a single brand seems a little dubious in the current competitive environment.”
And why they sell such expensive cars that are priced the same as some Audis has always been a mystery to me. Other manufacturers (Acura/Honda, Toyota/Lexus, etc) seem to have much less overlap in their price ranges.
Another thing, if VW’s are so well engineered and manufactured, how can they continue to be so unreliable? A friend’s ’98 Jetta GLX (with the nice VR6 engine) dropped its passenger window on him last winter the morning of a massive snow storm. Not so bad, until a tractor trailer sent a wave of slush through the open window on the highway :) He’s since traded up to an S4 cabriolet.
ash78, Skodas were sold in the United States from the late 1950’s through about 1965. It was one of literally dozens of European and, latterly, Japanese manufacturers which dipped their toes into North American unsuccessfully.
The demands that dealers had sufficient service area vs. the number of cars sold; quality control of one major product; good and unique marketing; and offering something unlike anything else on the market are largely why VW mopped up all of the competition in the 1950’s through the very early 1970’s.
Skoda would make a great addition to the US market, except that if they were sold alongside VW’s, VW sales would essentially evaporate.
Why pay more for less quality, when a perfectly nice, and similar, car is sitting across the showroom? It’s not like Volkswagen has much cachet in it’s name in the United States any longer.
Skoda even offers a Passat “clone” with it’s own sheetmetal, the Supurb.
See for yourselves, guys and gals.
http://www.globalautoindex.com/bodies.plt?no=19&ass=&g=Skoda-Superb
Then Czech out the Skoda line – you’ll be amazed at how nice they look. Pricing is significantly lower than Volkswagen pricing in Western Europe, as well. I’m trying to remember (not having any British pricing books in front of me) but it may be as much as 20% less car-for-car.
SEAT, of Spain, is in a similar situation to Skoda except that the prices are near German money, the quality is worse and VW are considering the closure of the entire operations. They also offer some very weird looking cars in an attempt to offer “something different.” It’s apparently not working well….
another open artery for Volkswagen group.
Lots of good stuff here. A well-written article, and interesting comments which indicate there is still a lot of love for VW products. Glenn A: I agree, both the Ro80 and the K70 were great, revolutionary cars. The aluminum Audi A2 was also fantastic; I have fond memories of comfortably travelling long distances at an average speed of 95 mph and getting 38 MPG. All three however were too expensive to build and never made a profit. The car that was both profitable and forward-looking was the MK2 Golf. The 1988 model I drove as a second car for a few years is still a benchmark for me in terms of ride comfort and quietness, fuel economy, handling, speed, durability and reliability.
I’ve looked extensively at VWs recently because I like the new MK V Golf for a variety of reasons, and I think they are valid to mention here.
1.) I believe the 2.0 DSI was the first direct-injected, turbocharged engine to hit american shores. It is quite refined and powerful, and can easily make more power. We’ll see about reliability
2.) DSG availability – Personally, I think VW makes the worst clutches in the world. They are all extremely long, and I find them to be very vague feeling. The MK V GTI brought DSG availability to the states….again, we’ll see about reliability.
3.) Interior: It’s a very classy design, and fairly well executed. There are some ergonomic foibles; it’s no Honda. But it’s got a more timeless look than, say, my 06 Civic SI. Plus, there are ALOT of thoughtful details.
4.) Price point: Right now, I think it’s the only car on the market (1 1/2 years after it’s debut) with HID lights standard at a 22k base price point. For it’s overall package, it’s very reasonably priced. I haven’t said that about VWs in awhile.
As far as performance goes though…VW has sacrificed some credibility. They used an Electronic Brake Differential which slows down acceleration in the twisties, they don’t allow braking and throttle to be applied at the same time, and their 2-door, 2.0 liter GTI weighs in around 300-400 pounds heavier than my 2-door, 2.0 liter Civic SI…Now I know some of that is the hatchback styling and extra content…but that’s quite porky, and some of that weight is quite high off the ground.
I’ve noticed recently VW has been marketing “3 cars for under 17,000″….I assume that means the jetta, rabbit, and beetle.
Sounds to me like they are starting to move themselves down to the upmarket econo-crowd. If they get a hold of their reputation for reliability, I can see a rebound in their future.
But first, ditch that god awful 2.5 liter engine…it’s a model of what a modern engine shouldn’t be.
Joe
I think this is the first time I’ve read an automotive journalist telling the honest truth about VW. Many of their cars are nice when they work. However, the ‘when they work’ part is often interrupted by lengthy periods of not working. Amongst my circle of friends, relatives and co-workers there are an inordinate number of VWphiles. Without exception, they’ve turned their back on them because of reliability issues (mostly electrical), poor dealer service, and exorbitant repair costs (for labour AND parts). They’ve become an ‘under warranty’ only ownership car.
I’ve ready many missives about the Big 3 deserving their fate because of their historically poor reliability. If that’s the case, then VW (and their teutonic brethren Benz) should be marching to the morgue alongside them.
“A friend’s ‘98 Jetta GLX (with the nice VR6 engine) dropped its passenger window on him last winter the morning of a massive snow storm. Not so bad, until a tractor trailer sent a wave of slush through the open window on the highway :) He’s since traded up to an S4 cabriolet.”
Let’s just hope nothing gets stuck in the down position there! ;)
Actually only about 20% of the voting stock belongs to the state of lower saxony, which is a smaller stake than Porsche’s. The state has never put any money into the company. It still is quite powerful, because a specila “VW law” forbids any investor to have a larger share of voting power than the state of Lower Saxony. However, this law is likely to be overturned by European legislation in the near future, so the power of the unions, which is strongly tied to the state’s stake, is likely to weaken. After that, Porsche will do their magic with the company. They know a thing or two about turning around a company in a difficult situation. Dont count VW out just yet.
“they are clearly marginalizing their enthusiast customer base in order to cater to the whitebread mid-market.”
Clearly, you never owned a 32hp Bug that couldn’t do 65mph back when the speed limit was 70 mph everywhere.
Robert,
Touché! I’ve heard all the stories from my old man, currently on his 17th VW (lifetime), including the pains of driving a Beetle cross-country several times. I grew up riding around in a Squareback and a MkI Jetta that he maintained himself. I suppose I should qualify the term “enthusiast” to include both people who are into modding/performance or just general DIY. Historically, many people have associated VW with “easy to modify” (eg, bolt-in Porsche mills; chip tuning, etc) and “easy to work on” (esp. air-cooled). In my mind, the further they get away from that, the worse they’ll be in the long run.
I think Martin Winterkorn’s promotion to top dog at VW is going to help. He obviously did an excellent job at making Audi fully competitive with MB and BMW. I think he will pull back VW from excessive in-house competition (Phaeton), and be more decisive. Pichetsrieder dithered too much.
Porsche’s invovlement will undoubtedly push VW into more difficult decision about cost control, for which Wiedekin is well known for.
Importing Skodas to the US won’t help for several reasons: with the exchange rate, they would still be not profitable enough. And to establish a second brand and dealership network would be insanely expensive and difficult.
VW will have no choice but to produce more for the US in the western hemisphere, and focus on cost containment and quality control.
I could be wrong, but isn’t VW doing very well?
“Martin Winterkorn, chairman-designate of the board of management at Volkswagen, has said he is sure the group will meet is 2008 profit goal of EUR5.1bn ($US6.5bn).”
This year has been a banner year for them.
One of the reasons VW has such a bad rep for quality right now is because they *did* offshore production of a bunch of vehicles to Mexico. The Mexican-built Jettas are the ones that everyone hates (window regulators and coil packs, anyone?).
Audi already has a car built on the mkV platform — the A3 is pretty much identical to the GTI save having a bit more posh interior and uglier exterior. But it’s all the same engine and mechanical bits. You just pay a premium for having overlapping circles on the front. So, if people think they’re already paying too much for a GTI, and the A3 costs arguably the same amount to build, where does that leave VW?
FWIW, I just bought a mkV GTI because I couldn’t find a car I liked better that had an automatic transmission and a hatch. Yeah, my GTI is ‘overpriced,’ but it’s got features that our Legacy GT doesn’t even have, for less money (and the LGT is a great deal in it’s own right). I see tons of jettas and rabbits and new beetles on the road every day. It’s a shame that VW is stuck with german labor laws and can’t make a profit on their cars. But offshoring (as they already discovered) isn’t the answer.
Excellent article, Thomas.
Any thoughts on VW Canada’s strategy of selling the Mk. IV Golf alongside the Mk. V, badging the former “City Golf” and pricing it closer to the B-segment?
IMO, Volkswagen’s U.S. operations need to adopt this strategy pronto. The 20-30 y/o demographic fell in love with the Mk. IV Golf’s characterful, classless lines, but show little enthusiasm for the Mk. V. Moreover, the former’s interior quality, feature content, and road manners are still very competitive in the lower end of the economy segment (Caliber, Cobalt, Spectra, etc).
Of course, this is all assuming they’ve worked the manufacturing bugs out of the Mk. IV, which is a big “if.”
Just one little, tiny nit to pick: the Toyota Corolla has sold 9 million more copies than the Bug
http://en.wikipedia.org/wiki/Toyota_Corolla
The City Golf/Jetta idea is excellent, especially if VW buyers are enamoured with the 90’s range of cars.
Heck, if GM can sell slightly tweaked J-Cars for over 20 years, VW should have no problem selling old-tech Jettas and Golfs until 2015!
Might not do too much for the brand but a ton for the bottom line!
CJ
Just one little, tiny nit to pick: the Toyota Corolla has sold 9 million more copies than the Bug Corolla is the best selling nameplate of all time, but as the article states, the Beetle is the best selling car design. Corolla is in its tenth generation and has been everything from a rear wheel drive 2-door liftback to a front wheel drive 4-door sedan to an all wheel drive station wagon. The wheelbase has grown from 90 inches to 102.4 inches. The Beetle soldiered on for 65 years with the same instantly-recognizable design.
It was said earlier in this thread, but doesn’t seem to be addressed in either column or comments section….I have very recently read that VW actually had a fantastic year globally, and it doesn’t seem like the numbers are “cooked-books” style either.
With folks calling for a VAG deathwatch, can anyone shed some light on this?
Splitting hairs much, Frank?
Admit it Jonny, you got served.
I admit nothing, as if you think the Bug survived unchanged for all those years, there’s a bridge in Arizona I’d like to talk with you about.
From Wikipedia, since you put so much stock in it: "By 2003 Beetle annual production had fallen to 30,000 from a peak of 1.3 million in 1971. On July 30, 2003, the final original VW Beetle (No. 21,529,464) was produced at Puebla, Mexico, some 65 years after its original launch, and an unprecedented 58-year production run since 1945 (the year VW recognizes as the first year of non-Nazi funded production.)" Yes, you've been served twice.
Why is everyone saying VW has given up on their enthusiast market? Has anyone seen the new GTI?? The new R32 that’s coming? VWNA is a BIG supporter of enthusiast events, they built a garage complete with a basketball hoop at Waterfest last year (seriously) where they had a life size fast, Helga and a few specialty models on display (even a schwimmwagen from a museum shipped over from Europe). If anything, I think VW is about to make a big increase in sales if their new TSI engines make it across the pond (I do believe in 2k8) and with the new Scirocco concept due for production in 08 or 09 they will be right back on top. The only bad thing I see is that there is no new beetle design yet, although I am sure one is on it’s way. I say they make one version a rear-engined, rwd or awd sporty car with the 2.0t or any of the TSI’s in it. THAT would be awesome.
Smaller, cheaper, tuner-ready platforms are the way to go.
————————————————
Let’s see, I think we already have VW’s opinion on this.
“Smaller, cheaper, tuner-ready platforms are the way to go.”
Since the 1.8T, a simple software upgrade will increase power significantly (for my 1.8t, a chip will increase power from 179 hp/173 lb.ft to 215hp/247lb-ft http://www.goapr.com/VW/products/ecu_upgrade_golf18t.html )
Since the 1.8T, a simple software upgrade will increase power significantly (for my 1.8t, a chip will increase power from 179 hp/173 lb.ft to 215hp/247lb-ft http://www.goapr.com/VW/products/ecu_upgrade_golf18t.html )
That’s next on the list of mods for my 2003 Wolfsburg Jetta 1.8T….
Thanks for all your comments. I was tied up with work, so I didn’t have the time to respond earlier.
@Paul Niedermeyer
I’m not sold on Winterkorn just yet. He did an excellent job over at Audi, but it was arguably a much easier one. Also, one consequence of his arrival in Wolfsburg was that VW lost Bernhard who can be credited for Volkswagens recent upturn.
Regarding the Skoda brand, I also don’t think that it would be profitable to import their cars, but I’d guess that the exchange rates aren’t the problem. Skoda’s factories are all in eastern Europe where there’s no Euro and exchange rates probably way better (though I don’t have any hard data on that at the moment).
@SherbornSean
I think you hit the nail on the head. The classic middle class that was typical of the 1950s and 60s is evaporating. Nobody wants to be average anymore and that’s why all “middle class brands” have those kinds of problems, not only automakers.
People either don’t give much about certain brands and just want the cheapest thing out there that fulfills their needs, or they are very sensitive to brands, quality or appearence and want the best. The air between “the cheapest” and “the best” is getting thinner and thinner.
However, I don’t think that a brand like Audi will fall into that category. Their image in the US isn’t up there with BMW or Mercedes, but everywhere else in the world it almost is. Audi even outsold Mercedes in Germany this January for the first time in history.
The TDIs are easily chip tuned for a 30% increase as well. I’d like to beef up my Golf, but I fear that the Tiptronic autotrans will self destruct.
I owned a 1992 Passat which I liked a lot except for those horrible motorized seat belts. At the time VW cheaped out by using them instead of air bags as the law was odd at that time. Of course the automatic transmission failed suddenly at 20k miles, but luckily that was covered by warranty. Of course when I went to take the car in for repair I discovered that my VW dealer was no longer a VW dealer!
No mention is made of the fact that for the US market almost all VWs are built in Mexico and use many central and south american components. There is no high cost excuse for VW’s high US prices.
To my mind VW has four huge problems in the US.
1) A long history of problematic products and a business culture which attempts to minimize warranty expenses rather than maximizing customer satisfaction. The defective ignition coil fiasco comes to mind.
2) A highly uneven quality dealer network.
3) Overpriced products compared to Honda and Mazda, which are the real competition. Why can’t VW’s Mexican Jetta be price competitive including equipment with Honda’s Ohio Civic?
4) Forgetable advertising. The last campaign anyone remembers for VW was the 1990s Fahrvernugen campaign, which is much derided but at least had some mind share.
P.S. Where the **** is the Jetta Wagon?
Replying to ash78:
The key single problem I see with VW today–which may be fine for business, at least in the short run–is that they are clearly marginalizing their enthusiast customer base in order to cater to the whitebread mid-market.
I see the exact opposite. VW is supposed to be people’s car. Their downfall is caused by leaving the whitebread mid-market and only focus on the small number of so called enthusiasts.
Unless they can fire 70% of their workers and shrink their output, otherwise they cannot expect to compete with BMW. They have to compete with Toyota/Honda.
I know VW is doomed when a Jetta costs as much as a Camry. If VW is serious about gaining market share, a Passat should be 10% cheaper than a Camry, since the former is inferior quality-wise.
Replying to Frank Williams:
Corolla is the best selling nameplate of all time, but as the article states, the Beetle is the best selling car design. Corolla is in its tenth generation and has been everything from a rear wheel drive 2-door liftback to a front wheel drive 4-door sedan to an all wheel drive station wagon. The wheelbase has grown from 90 inches to 102.4 inches.
The Beetle was originally R/R layout, and F/F now.
Corolla still outsells Beetle as a car design even if we only count FWD Corollas.
The Beetle was originally R/R layout, and F/F now.
Corolla still outsells Beetle as a car design even if we only count FWD Corollas
I never said the Corolla nameplate didn’t outsell the Beetle. The numbers for Beetle sales don’t include the totally different FWD New Beetle model. They’re only for the 65-year run of the original, hence the still-undisputed claim to the best selling car design of all time. Which FWD Corolla design are you saying has outsold the Type 1 VW design? The E80 series design? The E90 series? The E100 Series? The E110? The E120? The E140? The only thing all these have in common is FWD layout and the Corolla brand name. There’s no way anyone could say they’re the same design.
Paul N:
:: Importing Skodas to the US won’t help for
:: several reasons: with the exchange rate, they :: would still be not profitable enough. And to
:: establish a second brand and dealership network
:: would be insanely expensive and difficult.
They could be sold at Oldsmobile and Plymouth dealers. Skoda sold a hardy rear engine sedan
in the early-mid 1980s in Canada, they are not
a new name to North America.
I know VW is doomed when a Jetta costs as much as a Camry. If VW is serious about gaining market share, a Passat should be 10% cheaper than a Camry, since the former is inferior quality-wise.
People tend to confuse quality with reliability.
If you are claiming the quality angle, I disagree. VW fit and finish is on par with Toyota, and their interior design/fit and finish is superior.
If you are claiming the reliability angle, we are in agreement…
No mention is made of the fact that for the US market almost all VWs are built in Mexico and use many central and south american components. There is no high cost excuse for VW’s high US prices.
Incorrect. The only Mexican-made VW is the Jetta. The Rabbit, Passat, GTI, Eos & Touareg are built in Europe…
Incorrect. The only Mexican-made VW is the Jetta.
Incorrect. The New Beetle is also made in Mexico.
Not exactly pertinent to this article, but VW lost me as a future buyer when VWOA began harassing, cracking down and shutting down small businesses that were using the VW logo in the air cooled world about 8-10 years ago. It became nearly impossible to find repo parts for our beloved old Beetles and Karmann Ghias. Once VW began acting as the new gestapo they lost me as a customer permanently. I figure they have lost over $100k from me already.
Replying to fahrvergnugen11:
People tend to confuse quality with reliability.
If you are claiming the quality angle, I disagree. VW fit and finish is on par with Toyota, and their interior design/fit and finish is superior.
If you are claiming the reliability angle, we are in agreement…
Reliability is an essential, if not entire, subset of quality.
Replying Frank Williams:
I never said the Corolla nameplate didn’t outsell the Beetle. The numbers for Beetle sales don’t include the totally different FWD New Beetle model. They’re only for the 65-year run of the original, hence the still-undisputed claim to the best selling car design of all time. Which FWD Corolla design are you saying has outsold the Type 1 VW design? The E80 series design? The E90 series? The E100 Series? The E110? The E120? The E140? The only thing all these have in common is FWD layout and the Corolla brand name. There’s no way anyone could say they’re the same design.
Frank, I can understand it’s very popular among piston-head to say all the good things about VW, but that may not help your objective judgement.
Cars do change over time. Even Bettles, if you look at Wikipedia, are slightly different over the years. I doubt the general public would think that the E110 (2002 Corolla) is SO different from the E120 (2003 Corolla). Most people didn’t even notice a model update.
If we only count absolutely the identical looking/engineering/equipment car or truck ever produced, the top one probably would have been the previous gen F-150.
@wsn:
The original Beetle had model updates, but it essentially remained the same design. Same platform, chassis, air-cooled boxer engine in the back and so on…
The Corolla however is merely a nameplate, just like the New Beetle compared to the original Beetle.
If you look at the total sales of “nameplates” the most successful ones are:
1. Toyota Corolla (30 million)
2. VW Golf (25 million)
The two most selling “car designs” however are:
1. VW Beetle (21.5 million)
2. Ford Model T (15 million)
Replying to fahrvergnugen11:
>”People tend to confuse quality with reliability.”
What?!?!? Reliability and quality go hand in hand when it comes to cars. I doubt the people who are having problems with their cars (VW,GM,Ford,Chrysler, etc.) are saying their cars use quality parts, but have poor reliability.
I’ve seen quite a few VW apologists here claim that VW’s reliability problems were due to Mexican and Brazilian manufacturing.
My wife owned a 2000 VW Jetta 2.0(Mexico) and I still own a 2000 VW Golf 1.8t(Germany). Both of our cars had similar problems (window regulators, MAF sensor, O2 sensor, glove box…etc). We remember the first two years of owning our cars as miserable.
To make matters worse, our dealer treated my wife as a second class consumer. She refused to take her car in for service after the service manager claimed that “VW engine oil” is better that what our independent shop was using (Mobile 1).
We now own a Jeep GC and i’m buying a G35X this year. Good riddance VW.
-ted