I’m not sure why The Wall Street Journal thinks Germany is the next Japan in the U.S. new car market. For one thing, the market itself is lying in the gutter, naked, hungover and bleeding. In this environment, cutting capacity, protecting market share and not losing too much money (a.k.a. eliminating all but essential expenditure) is the only sensible plan. In fact, this article– “Europeans Raise Pressure on Detroit”– would be better entitled “Detroit’s Dead, VW’s Arrogant, BMW’s Hopeful and The Japanese are Hunkering Down.” Scribe Kate Linbaugh is content to take VW’s pre-crash, snicker-worthy “1m Vehicles or Bust” proclamation at face value, and extrapolate from there. “VW is investing in its first U.S. factory in two decades and expects to triple U.S. sales to one million vehicles by 2018. BMW is introducing a new small car and expanding its distribution network.” Never mind those previous, abortive efforts to make the U.S. Germany’s Land of Plenty (excluding Bimmer’s two-mode hybrid SUVs or VW’s Phaeton). “This time, European car makers insist more diverse product lines, healthy marketing budgets and access to nonunion labor can overcome past stumbles. VW is developing specifically for the U.S. several new models, including a family sedan. [VW Routan shown, irony be damned.] A new American manufacturing operation will free it from the currency swings that have hampered its U.S. sales in the past.” Do I detect a thinly-veiled attempt to say Japan and now maybe even Germany have a better U.S. business model than Detroit; a theory made on the cusp of December’s disastrous sales numbers to create maximum embarrassment for Motown? Well duh.
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Something I noticed and thought relevant, in Europe, the primary rental car is a VW. Sure you have your odd Renaults, Opals, and Fiats but it seems that each class is dominated by VW. As in “VW Polo or similar vehicle”.
Maybe VW wants to take away market share in the US rental market…the only ones buying small American cars?
Well said.
For any carmaker, winning the media battle is at least half the battle, particularly in the politically-charged North American market. So, VW is putting a brave face on things, hoping to not have to “postpone” their North American plant a-la Toyota. VW does not want to be embarrassed with their “second coming” to the USA manufacturing environment.
In reality, they now* have all the capacity they need at their Puebla, MX facility, making their Tennessee plant unnecessary for capacity, but important (to VW) politically.
*a 12-million vehicle market, best case estimate.
Politicians won’t allow anything like lack of a viable business model to get in the way heaving heaps of new cash on VW’s plant and equipment investment.
VW would be foolish to pass on the additional pork barrel giveways to contributors stimulus monies that will be showered upon any firm with a pulse that agrees to break grounds on anything.
I hear that Kate Linbaugh the WSJ writer, just had a baby so that she could buy a routan.
I actually saw a few Routans on the road down here near Charleston, SC the last few days. Geez, I guess there are suckers born more often than I thought. The German side of me is embarrassed for VW more than I can say. The American side of me is embarrassed for the fact that we’re actually BUYING these things!
Oh that VW German engineering. Gota love that Routan Dodge Caravan pushrod V6 and all. Oh and those lovely Mexico engines.
When they say the Routan is “German Engineered,” they mean Daimler owned Chrylser when the Routan was conceived and it was Daimler and VW who came up with the crazy idea of rebadging Chrysler vans for VW.
The Routan ad campaign touting “German engineering” lost any and all credibility I had for VW; admittedly not much to start with, but anyway, yeah.
Between the lines, it’s screaming that American consumers are stupid, specifically, anyone who buys a Routan. On that principle alone, it’s not even in consideration. Why would anyone spend money on a vehicle that tells the world they are a sucker?