VW's has strengthened its position in Europe as the leading brand, claiming more than 20% market share. In the US, though, VW sales have dropped by an average of 25,000 cars every year for four years, and the company has lost close to a billion dollars each of the past three years. Stefan Jacoby, the former head of global sales and marketing who raised the firm's Euro market share, has been put in the top US spot in order to achieve one goal: breaking even in the US by 2009. Blame for the slide can be attributed to a variety of factors (and we're sure you readers have plenty of theories about what's wrong with and how to fix VW), but unless they figure out how to get them right, the feeling is that VW could leave the US market. It's almost impossible to believe that the company known for fun, funky cars that drove until the wheels fell of, two cars that have been famous for decades around the world (Beetle and Golf), deep brand equity, and fervent brand loyalty would have to grab its wurst and head back home. Yet the situation was summed up by one exec as: "For the first time in some time, the phrase 'If we are to stay in the U.S.' precedes a lot of conversations at VW."
[Source: Business Week]
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Reader Comments (Page 1 of 6)
Will @ Jul 18th 2007 3:10PM
I don't think VW needs to leave the US, but I do think they need to rethink their tactics a little. Lately it appears that VW is trying to go upmarket. I wanted a diesel Jetta for a while, but I could not justify the cost. When you have average Jettas going for around 20 to 25k, and optioned up Jettas for 28k or so, there is a problem. I am pulling those numbers out of a hat, but I am willing to bet they are close. Yes, I know they have a Jetta available for under 18k, but it is way to stripped down. The options on a VW kill you also. If you want leather, you must add a 3k package with a bunch of junk I don't really care about. When you hit 28k for a Jetta, you might as well look at an Audi or BMW for christ sakes. Volkswagen is SUPPOSED to be a car for the people.
vectorbug @ Jul 18th 2007 3:17PM
Actually its just under $19k for a rabbit with optional 18" wheels, OEM body kit and the ipod connectivity. They come with a lot of stuff standard at the $15k price tag.
All American Dude XX @ Jul 18th 2007 3:35PM
like you said...OPTIONED OUT. they come with a lot of features standard if not just the same as the competition. I don't get why people complain about the price increase optioned out when of course you'd expect it to increase with the additional options. Simply put if you can't afford the options...DON'T OPTION IT OUT (do you need the body kit, do you need the 17-18" rims, do you need the sunroof, do you need the Nav system)! It has all you need standard. Yes they can get pricey with the options, but that's what's great about VW; you can get the car you want just the way you like it with the options you want it and the fact that those options ARE available for a car of it's type is great. You'd be hard pressed to find an Audi or BMW for 30K with comparable options. I mean come on, according to their website, a decently (not FULLY) optoned out 08 econo-box scion Xb, for example, (supposed to be affordable) can go for as much as 25K!
geo.stewart @ Jul 18th 2007 3:42PM
I cant get a sunroof on a 3dr wabbit. dont want a 5-dr. wanna 3-dr.
bummer
epilonious @ Jul 18th 2007 5:22PM
VW has been plagued with it's "cheapened upscale" (or "mexican chic" if you will) image since the turn of the century, and the whole "$17,000 car dropping $1000 parts right out of warranty" thing along with a disproportionate amount of lemons soured a LOT of people and killed the resale value. There is only so much soft touch plastics will do until you realize that getting the corolla will make you less uneasy in the looming face of fukenbroken.
Tyk @ Jul 18th 2007 3:15PM
A long time ago, they want VW to be MB and Audi to be BMW ... hence the ill-fated Phaeton, from which they never recovered.
JC3 @ Jul 18th 2007 3:20PM
VW's problem is shoddy quality.People bought into their "German engineered" tagline then got burned and never came back.
Amber @ Jul 18th 2007 3:47PM
Whats funny is the most troublesome part of VW has been the 2.0 4 cylinder. At 115 hp it has pathetic acceleration and has had numerous problems such as valve leaks, head problems, oil burning among others.
The 1.9 Diesels, 2.8 VR6 plus 1.8 Turbos have been great engines.
And when you get into a Golf, Rabbit, Beetle, unless you spend 25k you are stuck with the 2.0 which has ruined a lot of people's experience with VW.
Amber @ Jul 18th 2007 4:00PM
Correction:
"When you got into Golf, Jettas, Beetles, and Cabrios unless you spent 25k you were stuck with the 2.0 which ruined a lot of people's experience with VW.
Doogs @ Jul 18th 2007 4:28PM
"Whats funny is the most troublesome part of VW has been the 2.0 4 cylinder. At 115 hp it has pathetic acceleration and has had numerous problems such as valve leaks, head problems, oil burning among others.
The 1.9 Diesels, 2.8 VR6 plus 1.8 Turbos have been great engines."
Er...what? Is this 2003?
Volkswagen's "base" engine these days is a 2.5L inline-five. Wish I knew why - it's bigger, weaker, and gets worse fuel economy than the 2.0T.
1337 @ Jul 18th 2007 4:46PM
The non-turbo 2.0L hasn't been in the US market for a couple of years. The biggest problem is now the 2.5L. The 2.5 performs like a 4 cyl and gets the fuel economy of a V6 (a la Chevrolet Colorado). I hate comparing VW to Chevy, but in this situation it is really true.
Amber @ Jul 18th 2007 4:49PM
Doogs: "Er...what? Is this 2003?"
VW's problems are not about people walking in last month buying 2007 VW and having it break down this week. Dont you read the article? This is a problem that has been brewing for 6 years. The major culprit has been the 2.0 engine among many other factors that has caused sales to drop for 4 years running. So yeah, we are talking about 2003.
brian hague @ Jul 21st 2007 7:57PM
Honestly the problem isn't the engines, it's the horrible dealer service, and VWoA can't do anything about it.
Take my $2000 axle replacement, $650 part and the rest was labor. VWoA didn't help at all, they said they have no control over the dealership service departments... I even got charged for a new hole!
This is the last f***ing VW *I* will ever own!
That's the problem, not the engines.
Don @ Jul 18th 2007 7:01PM
Check out some customer reviews of TDI-engined V-dubs on carsurvey.org...yikes. Definitely shoddy.
Mattias @ Jul 18th 2007 3:21PM
At the current exchange rate they should probably leave the US market and offer more Audis in the US. The cost to manufacture an Audi is not much higher than to build the VW equivalent, but the revenue is higher. So I4 A3s and A4s instead of Golfs, Jettas and Passats probably make more sense.
Paul @ Jul 18th 2007 3:22PM
The price point versus quality of the cars is wayyyyy off which is problem number 1.
1337 @ Jul 18th 2007 3:40PM
I disagree. The interior quality of my Mk V Jetta TDI rivals that of my loaded E320 CDI.
Jared @ Jul 18th 2007 3:47PM
1337:
The interior of my 2000 GTI GLX was also very nice. Unfortunately, the car was terribly unreliable and the dealer service departments were unreliable.
Until VW fixes that reliability problem, they will have major problems in the US market. They've made some advances in recent years, but still have significant problems. For example, the current Golf/Jetta V is having problems with frequent early failures of the AC system.
blitzkrieg79 @ Jul 18th 2007 3:24PM
What also doesn't help VW (or any other European manufacturer) is a high value of Euro (and it looks like it will increase for a little bit longer) towards a US dollar.
Ben H. @ Jul 18th 2007 3:26PM
When I was in the market for a sport compact, the SVT Focus had more value than the VW GTI. For the price, Ford had it beat. The Focus still has Golf/Jettas beat by a far margin, especially if you're buying used.