VW is planning to replace the Passat and Jetta with cheaper sedans "targeted at U.S. customers." At the Geneva Auto Show, VW Group CEO Martin Winterkorn said VeeDub's also contemplating small cars and perhaps a body-on-frame pickup for the American market. Automotive News [sub] reports the German automaker's pushing ahead with plans to build a factory in the States and have narrowed the site selection to North Carolina, South Carolina or Georgia. The plant will build a Passat replacement designed specifically for the U.S., with a new name and price around $20K. Winkerkorn also discussed other possibilities for the U.S. market: a small car based on the Polo, a family of small vehicles based on the up! concepts and a VW-built minivan to replace the Chrysler Town & Country clone Routan. Oh, and he wants to bring us a next-generation Phaeton, explaining "the Volkswagen brand needs a car like the Phaeton." What is it they say about those who don't learn from history?
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Of course, most of VW’s customers want a European car. Not their attempt at a Pontiac. I’d love to see the research telling them to ignore their customer base. I wonder if they used the same firm Scion retained?
All VW needs to do is get their reliability up and their prices further down (in Canada). I still can’t believe that a comparatively-equipped GTI w/leather+sunroof+18″ wheels is under $27K in the US and b/w $32-33K here. That’s $5K, meaning $100/mth more!
Their interiors and attention to detail (some call it over-engineering – personally I notice the small stuff, like how the trunk liner fits perfectly and is secured in place with other means besides velcro, etc) is what I like about their cars.
Spectacular. Let’s take VW (un)reliability, remove the brand cachet and over-engineered techy-ness of the vehicles, and build them in a brand new factory in the southern US (see Nissan’s massive quality troubles). But we’ll lower prices to fire-sale levels! That ought to increase sales.
Apparently they want to become the Dollar Tree of automobile manufacturers in the US.
And despite their plans to move the entire range of cars down-market, they’re re-introducing the Phaeton, a car that utterly flopped before. Just wait. VW won’t be in the US past the end of this plan, I almost guarantee it.
A new BOF pickup for the US market? Brilliant. With a reputation for poor quality, let’s spend huge bucks designing a vehicle for a contracting market that already has excess capacity and a new credible entrant that has had to resort to incentives to come close to their sales plan. Oh well, maybe they can buy a closed plant at a discount.
$20K passat substitute? say it with me…jetta
The Daimler-Chrysler product blitz of 2006 worked so well…why not borrow and repeat that plan for VW!!
VW, and the Passat in particular, has three issues here in the US:
1. Its reputation for poor reliability compared to Toyota/Honda/Nissan.
2. It’s priced above comparable models from Toyota/Honda/Nissan.
3. It’s SMALLER than comparable models from Toyota/Honda/Nissan.
If you make the car smaller while lowering the price, have you really accomplished anything? Consumers will look at the Camry, Accord, Altima next to this similarly priced VW Whachamacallit and choose one of the Japanese models because its a better size/value. How many people cross shop the Jetta versus the Japanese big three?
Honda, Toyota and NISSAN have all shown that you can build quality products here in the US. If they move the assembly to the US, then that move alone should address some of their currency exchange/profit issues.
Volkswagen seems to be unable to accept the fact that their reliability is abysmal. They like GM seem to believe that the problem lies with the customer and not with the product. They seem to think their pricing is killing them while ignoring that their low quality versus Toyota and Honda is what is killing them., It is a pity that their small car concept looks cool like a proper 2nd generation Xb.
Hasn’t VW been able to survive in the States as long as they have because of a sort of ‘niche’ market they have there?
I mean, it’s not because of rock-solid reliability or reasonable pricing, or anything.
Wouldn’t something like this abandon said market? Where would VW be then?
To an extent, I agree with L47_V8’s last statement. I’m not so sure this will exactly spell doom for VW.. IMO, it’s too early for such a claim. But I’m almost certain this won’t end up well for them…
I think they should have thought about moving production to the U.S. before, unless labor costs have gone down in Europe recently. I’m surprised it’s taken them this long to get a subcompact here. I just chalked that up to their recent “premium” branding. Blech. And that blinkered train of thought still shows up in the return of the unloved Phaeton. Unless it costs about half as much as the last one did, it’s going to be just as unpopular. The Tiguan needs to get here quick, too. The small SUV segment could account for at least half a million sales when the year’s out.
If instead of an S-class-challenging luxo Phaeton, they introduced a bigger-than-Passat sedan akin to the Toyota Avalon, there might be some kind of niche for it. But if they still think they can make it as a luxury make, somebody needs to institute some mandatory drug testing in the home office.
I think the problem VW has is that in Europe the brand has a lot more cachet than it does here. People still pay a premium for the Golf, even though they can usually get the same hardware in better-looking skin for less money with a SEAT or Skoda badge, and it reflects in higher resale values. That’s certain NOT true in the States, but I don’t know how much they realize it.
VW has really cut its own throat with the reliability issue, and I’m not sure the home offices in Germany understand the problem. The American organization has, I’m told, gotten into the habit of denying warranty claims so that they can report lower warranty costs and meet their financial targets. If you’re a German exec looking at the numbers from the States, the idea that there are issues may not be sinking in.
I’d like to comment but I’ve gotta give a lift to a co-worker whose Passat is in the shop…again.
VW does not take the American market seriously. Although it is the biggest car market and is (was) the most profitable, it is also the most competitive and VW does not know how to play it.
10 years ago when they launched great looking next cars across the line: New Beetle, A4 Golf & Jetta and B5 Passat they could have retained a good market share except VW could not follow up with market’s demand for reliability/quality even after the models had been out for years!
I can’t believe how much money the passed on by coming to the game so late with their SUVs. The Tiguan is still not here!
Let me say a few things about VAG. I own two of their products (B5.5 Passat and V-6TT) and feel an need to somewhat defend them.
1. IMO, VAG knew they could not be profitable in NA by producing in Europe due to the dollar vs. euro rate. So, instead of giving VOA mini vans, CUV’s, and small fuel efficient model they went upmarket with Phateon, 50K Touregs. Why because those models are profitable.
In addtion, China market, Lambo, Audi, Bentley, and Bugatti have far greater profit margin than VOA.
2. Over-engineering is German engineering. Plain and simple.
I have to remove three pieces just to get to the airbox to change the airfilter. I have to remove addtional hoses and clamps to get to the clamps for the airbox. All of these need to go back in place!! Is all this complexity necessary? No, in a Honda the airbox is just unfasten four clips and you have access to the airfilter.
3. This over-engineering leads to their unreliability problems.
This encludes all German brands(Porsche, Audi, BMW, MB,etc..)
However, in the high end brands people seemed to accept them as high performance maintenance issues. BTW, the 1.8T engine is a high performance engine but it is used in so many VW models owners treat it like a regular engine. Owners of 1.8T and 2.0T should not take their cars to Jiffy lube for oil changes!
In conclusion, Mr. Jacoby is correct VW needs to produce in NA for NA/SA market. He is also correct in NA does not need high performance Euro features. However that is asking a German not be German!! So what is the answer? Hire Honda engineers to develop the next generation of VW’s for NA!