VW's announced a new North American factory and whittled down the short list of locations in Alabama, Tennessee and (yeah right) Michigan. Volkswagen has only one problem with its U.S. market strategy, which calls for sales of 1m units per year: "we need models for the US market." Yes there is that. In an interview with Auto Motor und Sport, VW works council boss Bernd Osterloh says that picking the right models for the American market is a far more important (undecided?) issue than the American factory's location (yes way). That said, Osterloh claims the decision is not urgent; VW's Mexican facilities can begin production of the new, as-yet-undecided American models before the new factory is online. Osterloh calls the U.S. market a herausforderung (loosely translated as a pain in the ass) for the entire industry. Apparently VW doesn't even have a coherent diesel strategy for their deeply respected American consumers. For a German firm, that's saying a lot. Machts schnell burschen!
Find Reviews by Make:
Read all comments
VW hates American buyers and their fickleness, frugality, and reluctance to want to take the car in for warranty work every six weeks. But they see the profit potential. But nobody internally can reconcile the two.
Nonetheless, I will be applying for an analyst job at the VW plant if Alabama gets it (inside sources say we’re the front-runner).
Why don’t they just rebadge more Chryslers? Easy, quick, cheap to do.
This plan helps Chrysler out with their overcapacity issues.
This gives VW more access to non-Euro-based manufacturing, so costs can be kept appropriate to the US market without the capital involved in building a new plant.
And the rebadged Chryslers should be just about as reliable as regular VWs, so this looks like a big win all around (*).
I figure 99% of the effort on the rebadge will be spent coming up with names for the vehicles. Someone clearly put in a lot of overtime to come up with “Routan.”
(*) – Am I still bitter about the quality, reliability and durability of my VW? Yes.
Perhaps Volkswagen should sell rebadged Chrysler Sebrings as the Volkswagen Nuckinfuts model line. Personally, after owning a used Audi 15 years ago, and realizing the massive and many problems it had (and the huge costs of parts only made easier by the fact that my pal was a VW-Audi mechanic and we also tapped salvage yards for part after part after part), I would not bother with a VW product again. Read Consumer Reports and you’ll see the cars test well, but reliability of VW products suffers, and Audi is only marginally better. Though I understand Audi interiors are to die for, and even 15 years ago, my Audi had a really nice interior compared to the competition. But the electrics constantly broke down, which was maddening and annoying.
Well I think part of that is that EU warranties are shorter and there is a built-in cash generator for dealer work thanks to inspection agencies like the TUV. The fact of the matter is that Germans will take their car back to the local dealer for work long after a vehicle is out of warranty; reminds me a bit of the blue-hair crowd and their Buicks.
That said, I had a Bora (Jetta) that came w/a 2-year warranty; at year four I failed TUV for brake line corrosion…not an unheard of thing in Germany. Alas, I was told by the TUV inspektor that I had to go to the dealership to have my repairs done; otherwise, I would probably fail again based solely upon not having used the OEM parts installed by a factory-certified VW technician. It’s a huge game…and cash cow for VW.
Contrast this w/America, where the warranty is longer, there are relatively few state regulatory agencies inspecting vehicles, and the American penchant for arguing and litagation, and I can see why VW has a headache.
NOTE: Giving your vehicles the absolutely worst names in the automobile industry does not help sales much either.
You really can’t blame VW for their lack of a coherent Diesel strategy. NOBODY has one because the tail that wags the US Car Industry dog is CARB (The California Air Resources Board), who shift the goal posts regarding Diesel regulations just about every other year.
VW is actually the ONLY car maker who has consistently sold Diesels in the US over the past 30 years. Even Mercedes (who used to sell 50% of their products with Oelmotoren here in the states) only offer one model with a Diesel currently and spent many years since the CARB crackdowns on Diesel in the late 80s offering no Diesel options at all. VW and VW alone have been the only ones who kept delivering Diesels across most, if not all of the product line throughout the 90s and up until the last target-shift by California’s Diesel-haters. Even then they sold their most popular model (the TDI Jetta under a “last model year” exemption for a while.)
If you are going to take anyone to task about Diesel deliveries, how about California first, and EVERY other car maker other than VW next. Where are my Diesel options from Toyota? Honda? GM? Ford? BMW? Where have they been over the past 30 years? All I hear from them is “maybe”, “coming soon”, or in the case of Maximum Bob (channeling Dick Cheney obviously) “Go F**K yourself.”
What boggles my mind most about VW is the fact that since 1980(!) they have had several models in their product mix here in the USA that average ABOVE 40 MPG. A few of those (especially with 5-spd manual gearboxes) average 50 MPG or higher. Yet when have you EVER seen any advertising or marketing bringing that to consumer’s attention? If I was a VW marketer in Post-Katrina America, I’d be shouting from the rooftops: “We’ve got 40+ MPG cars RIGHT HERE!” Obviously the Marketing Dept at VWoA is staffed with abject morons. This market has been literally starving for fuel efficiency and they’ve been holding the cure without doing anything to sell it.
Yes, the US market is a pain in the ass, but if you market it right, you can make a mint.
–chuck
http://chuck.goolsbee.org
Plus VW dealers typically employ mechanics that are parts replacers, which means big bills for jobs that should be relatively simple and affordable. That in turn equates to very few repeat buyers.
My Jetta has only been to the dealer once in the 5 years I’ve had it. As a result the car runs well and I still have money. I was talking to a guy with a 2004 Passat wagon recently, and he was complaining about how it was a huge bill every time he took it to the stealer.
He’s had issues with coil packs with his 1.8T (but who hasn’t?). I gave him the name of an independent shop I use. He said he doesn’t think he’d buy another VW after all the money he’s spent on his Passat so far. I told him I didn’t blame him.
Until VW can build cars that go to the dealer as often as a Toyota or Honda, they’re going to continue to hate the US market. As Toyota has shown though, there’s money to be made if you can get things right!
I’ve been expecting them to make a play for Chrysler ever since I stood next to Piech and Winterkorn as the oogled a 2009 Ram at NAIAS. Might just be waiting for Cerberus to clean it up first. Get a bidding war going with Ghosn.
VWs and Audis haven’t been doing badly in TrueDelta’s Vehicle Reliability Survey–while they’re under warranty. Maybe their reliability really has improved. Maybe they just need another year or two before they turn south. Time will tell.
http://www.truedelta.com/latest_results.php
The real “reliability” problem VW has to do with the fact that, IMHO, the dealers are crazy, the indy mechanics are too far between, and the customers are relatively uneducated.
Cases in point on my 98 Passat:
Control arms (which suck on most Audis and Passats from 98-02): $2,000+ at the dealer, or $500 and an afternoon of DIY for a low/mid-skilled shadetree mechanic.
ABS module (another common failure): Around $1,500 for a new one at the dealership…or $200 for a remanufactured one with a 5-year warranty. And 20 minutes of DIY for both removal and reinstallation.
But 95% of their customers never know of these alternative…so I can’t blame them for running from the brand.
VW did stop selling diesels in the US for a while in the 90s. From 1992 to 1997, no VW diesels were sold new in the US. However, during that period, VW did offer the 1.9 TD in Canada in the A3 Golf, B3 Passat, and A3 Jetta.
VW is completely clueless about marketing in the US. I’ve seen the occasional TDI ad on TV in Canada, but I don’t think I’ve ever seen one in the US. The funny thing is there’s really no reason to advertise TDIs in Canada. With 50 state legal engines becoming available, I’ll be annoyed if they don’t advertise the new generation of TDIs in the US. Instead they’ll probably just advertise the gas 2.5 and the 2.0 FSI models.
True. There are a lot of OEM VW parts vendors online that sell parts at a much lower price that what you’d pay at the stealer. I once paid $46 for a fuel filter at the dealer because I needed one right now. I now stock up ahead of time. I can buy 2 fuel filters for $40 online, and that’s just the beginning of the price differences.
It seems that most customers that buy VWs buy based on safety. The guy I was talking to about his Passat wagon said he bought it because of the safety features and that he and his wife liked the looks of the car.
I have a friend that I tried pushing toward a TDI to for a while because he has a bit of a commute. But he’s not mechanically inclined, so I decided to stop trying. He wants to buy a low end Lexus, so I think that would be a better fit for him. He’s been driving a Corolla for about 8 years, so he knows what to expect with Toyota. If he bought a VW and was at the dealer constantly, I’d feel really bad.
“Friends don’t let non-mechanically inclined friends buy VW group products.”
One of VW biggest problems at least around the NYC metro area is that VW dealerships look like crappy “hole-in-the-wall” used car shops. They have almost zero presence and do not look like real auto dealers. Not very confidence inspiring for the potential customer. The dealer closest to me looks like something out of the 1950s when imported cars were a novelity, it is tiny white painted storefront wedged in between two local mechanic shops.
The joke is that VW expects to sell cars that sell at a big premium over the established competition from little “dives” that garner little to no respect for the brand. Today VW reminds me of Alfa-Romeo or Pugeout in the USA back in the 1980s when they were dying.
VW seems to suffer from the “Build it and they will come,” philosophy that served them so well from 1957-1977 when they had the original beetle and its variants. Since then they have run hot and cold. Remember their disaster with the Rabbit built stateside in the 1970’s?
Consumer Reports “Recommends” the Rabbit, and says its reliability has been better than average. Are things improving on that fron?
Chuckgoolsbee: The global shortage of diesel is even causing price spikes in Europe. The price differential her in the US almost negates the improved fuel economy.
Many parts of California are very polluted. Diesels pollute a lot. Therefore, the state of California has some very good reasons to be extra picky about allowing the sales of diesel cars here.
Based on what I can recall of my high school German, several decades later, I believe when giving a command, the correct form of the verb would end with -e, as in: Mache schnell burschen!
If US legislation isn’t making the US a pain for foreign makers to manufacture for, Detroit would be wasting a lot of money on lobbying.
Now, whether this is good for US consumers is another matter completely.
Das ist – Macht schnell Burschen!
Volkswagen simply has virtually the worst reliability of any maker selling in the US. Oh, if not the absolute worst, it’s definitely in the basement with whoever else might be in there. And VW’s unreliability is consistent across its model line — “equal-opportunity unreliable junk.”
I just can’t imagine how any literate human beings could possibly choose to waste their time and money on a Volkswagen. And the VW plan for world domination sure won’t happen if they continue to try selling the most unreliable pieces of junk on the planet.
driving course: If US legislation isn’t making the US a pain for foreign makers to manufacture for, Detroit would be wasting a lot of money on lobbying.
But somehow Toyota, Nissan, Honda, and Hyundai do just fine…
Menno
Nuckinfuts…you crack me up. Fell off the chair with that one.
I just want my diesel, damn it!
I drive a tremendous amount of highway miles between Chi town and southern MO…2 trips per month.
I simply need great HWY MPG…and seats that feel like a lazy boy.
Now, this sounds German to me.
And it needs to really enjoy putting on the mileage.
Now this sounds like diesel to me.
Maybe, just maybe, the new Subaru diesel boxers or the new Ford Ecos or the Honda (Sorry, I mean TSX) diesel will arrive soon.
…and seats that feel like a lazy boy.
Now, this sounds German to me.
Actually, it sounds like a Lincoln Town Car to me. The gas mileage isn’t very good, and they want 50-large for it(!), but nothing rides like a big-ass American land yacht. It’s like a couch on wheels.
I think things got away from VW just like they got away from Detroit.
Westmoreland was a terrible buy, they should have started greenfield plant then.
Modern day Beetle is Yaris. Or Focus. Its not VW Beetle. I am repulsed by the Beetle. Give them credit for trying with it though.
VW is a high cost producer with mixed bag of mildly attractive and unattractive products made for USA with well deserved bad reliability image. They over featured, which Americans want, and had to go cheap on the components. Tough starting point.
Plus they are short tens of billions of past revenue, having missed America’s self destructive SUV/Pickup craze.
Their small “other market cars” look great but average American wont buy them yet, especially at a premium.
With Porsche in controlling position, I have more hope.
“ABS module (another common failure): Around $1,500”
Wow, those POS ATE sourced modules also failed on countless Volvos, but Volvo only charged about $500 for a new one.
Looks like diesel prices are above gasoline prices by about the same amount diesel MPG is above gasoline MPG. Sure, it depends upon the car segment, but it all boils down to “not nearly enough diesel advantage to risk getting stuck with an unreliable Volkswagen.”
It might be strange to you to think of VW as a really big world player, but when I travel in China, anywhere Asia, Brazil…you name it…VW is an awful big player.
They have wonderful small trucks and cars that are a gas to drive. The problem here is not Detroit…its us.
We drive the manufacturers with our money.
If you think the opposite, you’re damned nuts.
It’s not Detroit…except they didn’t fight the will of the people and built what we wanted without thinking about the future.
You can’t rent a car anywhere in the world that’s not a standard transmission.
I was just in Brazil again and the small van was a stick.
But oh, not here.
Why?
Because it’s us.
Again I will state my point of historical view…
Somewhere along in the sixties, Detroit was taken over by the money guys more interested in the return for the shareholders…not the dreamers.
It’s hard to find “car guys” (sorry for the chauvinistic wording) running the car companies today.
Instead of long term planning, its short term earnings.
This is why I love Mazda. You can find the VP at the track driving a test car.
They still have it there.
“Detroit was taken over by the money guys more interested in the return for the shareholders”
They don’t really care about the shareholders either, all such talk is just for show. Management cares about lining their own pockets and stoking their own egos.
Paul Niedermeyer: The global shortage of diesel is even causing price spikes in Europe. The price differential her in the US almost negates the improved fuel economy.
I make my own fuel at home. It costs me about $1.45 a gallon. I could care less what it costs at the pump. Keep eating french fries America!
Geotpf: Many parts of California are very polluted. Diesels pollute a lot. Therefore, the state of California has some very good reasons to be extra picky about allowing the sales of diesel cars here.
But is that enough reason to kill the most fuel efficient technology available? Diesel “pollution” is mostly in the form of soot. Soot is mitigated by rain. I live in a place where it stops raining for about a week out of the entire year (Puget Sound, WA, USA) yet your state dictates that I can’t buy a car technology that I want? WTF?
–chuck
http://chuck.goolsbee.org
Pellico
Yes I meant VW “let it get away in the USA” (hey that rhymes) not “worldwide”
US consumer is certainly at fault, average wants to drive loaded F150 as personal vehicle, or similar, while eating and cell phoning, at full throttle in traffic. Food to fuel.
This is changing somewhat, but not the “loaded” part. Now they want loaded B-class cars with automatics styled as manuals.
Its hard to like the “average” car in USA, or its driver, being out on the fringe like I am.
Good comments Johnny Ro!
I have never related to the average American driver very well.
I had a series of Mustangs (’64, ’66, ’81). The two last cars were six cylinders. Everyone commented on how I ought to switch to a V-8 and all I could think about who big the engine was 3.3L and how little power it made (90 HP in the ’81!).
I liked the six but wanted a DOHC six with side draft carbs mated to a good 5 speed. The funny thing was that I knew nothing about BMWs at that point (I was 16-18 years old). The size was okay and the weight was okay but it was the tractor technology that I had out grown. I appreciate them for what they were worth now better.
When I switched to VWs it was b/c I was in Italy and VWs were common and familiar b/c friends had them in the USA. The Beetles were huge by comparison to some of the Fiats and I found a driver car and parts car for a good price. My mother lamented from 5,000 miels away about how unsafe they were until she and Dad visited. It was then that they came to know what a REAL compact car (microcar) is.
I was facinated by what the VW engineers had done to make it “live” and “last”. Neat package too. And it seemed so much more advanced than the Mustangs though it wasn’t. Tiny engine and yet it made enough power (1.2L = 40 HP) without a radiator. Enough that I towed a Bronco II 30 miles for a repair…
VWs cars continue to impress me. Small packages, well built, good details, and a hoot to drive and own. Of course their base car is still pretty simple compared to the VR-6, turbos and DOHC engines. I just wish their quality was better.
I defended my VW Cabrio a few weeks ago on TTAC as a good car with minor problems. I retract that statement as my a/c has failed and my power steering pump has begun to whine. Oh and my shifter bushings failed suddenly giving me twice the shifter movement as before. I still like the car, would buy another but if I relied on a mechanic to keep my car running it would cost more than the space shuttle to own.
FWIW I have never recommended their cars to “normal” people who have to pay for everything.
The a/c problem is a leak in the evaporator. ~$150 to repair myself. Shifter bushings are $25. Power steering pump is less than $75.
I have to take exception to what people are saying here: the NEW 2.0 TDI that VW is bringing into the US is the “BlueMotion” technology that cleans the exhaust at least as well or better than most gasoline engines… that combined with the fact that they use much less barrels of oil per year compared with gasoline engines. Better for the environment! The fuel cost offset in my area (Chicago) is not as bad either. Diesel is $4.79, but I filled up my Saab with premium gasoline (required) today at $4.65 at the same station!
I guess I must be one of the rare “lucky ones” — while my ’79 Rabbit was indeed an electrical POS, the 4 other VWs that I have owned since then have been very good cars. My current ’00 Passat wagon has been, hands down, the most reliable car that I have ever owned (granted, that includes a list of several German cars, and one 1966 Renault, so I’m jaded). And yes, I use an independent Bosch Service certified mechanic (located a few blocks from home), and I know where to get fairly-priced parts on the Internets. Class-leading safety and entertaining driving dynamics keep me coming back to the brand — and I’m jonesin’ for a new TDI Jetta SportWagen (since VW doesn’t see fit to bring a TDI Passat wagon to the USA).
Bernd,
Oh right, it’s our fault that:
Your overall brand reliability ranks near the bottom of Consumer Reports latest testing.
You take to long to get product to market (Where is the Tiguan? Every single company has a CUV on the market)
Your products are consistently thousands more than your competitors.
The dealer repair experience is less than satisfying.
All three of my VAG products have had electrical problems, mostly related to power windows.
You try to move the brand upmarket for some drug-induced reason, when the brand stands for affordable German engineering in this market.