Volkswagen is making money hand over fist right now thanks to cost cutting measures and increased global sales, and the German automaker wants to keep the good times rolling. High commodity prices for items like steel, aluminum and rubber are beginning to eat away at VW's cash horde, so the German automaker may hike the prices of its vehicles. VW marketing chief Detlef Wittig told reporters that he feels automakers are afraid to raise prices in such a competitive sales environment, and that the company was monitoring the situation closely. While VW may not be afraid to pull the trigger on price hikes, it likely still won't ask customers to pony up the entire amount for high commodities. A lot will depend on whether VW's many competitors also jack up MSRPs, and by how much. It seems as though most automakers here in the States have either announced price hikes or are "thinking about doing it." The market is even more competitive in Europe, so such a decision isn't as easy. Wittig expects several automakers to raise prices in the second half of the year.
[Source: Automotive News (subs req'd)]
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Reader Comments (Page 1 of 2)
Ligor @ Jul 24th 2008 8:20AM
already over prices POS are now gonna cost the buying public even more
who cares anyways
AntBee @ Jul 24th 2008 10:20AM
Exactly!
kdf @ Jul 24th 2008 8:21AM
the industry right now is between a rock and a hard place. gas prices are going up, people are buying less expensive cars (or less cars in general), auto makers are losing money. and because auto makers are losing money they have to compensate to increase prices. and because car prices are going up, people buy less cars.
this is inevitable in the current economic climate.
Chris @ Jul 24th 2008 8:24AM
Considering they can't sell Tiquans to save their lives in the US I doubt they can afford to raise prices across the line
Chase @ Jul 24th 2008 10:19AM
VW isn't making their profit in the US. Its coming from Audi of Europe and VW in developing countries.
moose @ Jul 24th 2008 10:26AM
Why try too hard to sell Tiguans in the US for a smaller profit margin than they can get with the car in Europe where customers have to wait up to six months for delivery of the car. The Tiguan is a huge success for VW despite the negative comments it keeps getting on here.
mike @ Jul 24th 2008 8:45AM
What about quality hike?
Or would that be immoral?
akboss302 @ Jul 24th 2008 8:56AM
That's a good point, Mike. OK if you want to raise prices, understandable if your car costs 20% more to manufacture, its hard to avoid that. But there has to be some means of compensation to give the end customer more than just a kick in the ass - quality or otherwise. Balancing the new cost with lower lease and finance rates are a good start. Also, the addition of 'options' to base model cars doesn't cost the manufacturer much and gives the customer a lot, so throw in a sunroof and a multi-CD deck.
Atomicbri @ Jul 24th 2008 9:04AM
I have an '07 Rabbit and its quality has been excellent. Not one issue in 27K miles and ticking. I know some VW products in the PAST were not built that well (past 3 VWs I owned were also good cars, never owned MK4 models so don't know bout those) The Rabbit is even recommended in CR as well as having high marks in the quality dept. not that CR is a bible to follow. I am just saying unless you have driven or have owned some, it is easy to throw out "oh they suck".
Ligor @ Jul 24th 2008 9:05AM
hahah
exaclty,
maybe they should start by assuring their cars are not catching fire in the parking lot
P.V. @ Jul 24th 2008 9:30AM
I don't think it is quality that is the issue so much as long-term reliability, as I have heard lots of praise for the interiors but horror stories about cars catching on fire.
Maybe they should start making INTERNAL (not SPONTANEOUS nor EXTERNAL) combustion engines for a change.
RSR @ Jul 24th 2008 9:51AM
Atomicbri,
As a previous VW owner (MKIV), and having quite a few (at least 5) friends with VW's ranging from Golf to Passat, I think I can say its long term quality isn't impressive. None of us still own a VW. I held on the thing (no pun intended) longest but eventually gave up.
Of course, 5 samples aren't significant statistically, but numerous studies seem to agree when it comes to long term quality (JD Power, CR, etc.). 27K miles aren't much these days.
yacoub @ Jul 24th 2008 8:55AM
Audi & Co have never seen a higher price they didn't like. Overpriced as usual.
Bill Montgomery @ Jul 24th 2008 6:29PM
Audi is not overpriced. They are less expensive than bmw or merc and IMO are the better car in most segments of the luxury class. Look at the R8, no competitor, the RS6, S5, and new A4. Audi FTW!
P.V. @ Jul 24th 2008 9:28AM
Maybe with this, VW can be the premium car maker it really is and not the economy car maker it wants to be.
How about some reliability improvements to go with that?
tankd0g @ Jul 24th 2008 9:34AM
Hike those prices, it'll hurt even more when you have to sell it to me in a year's time with $5000 of incentives on it.
cordite @ Jul 24th 2008 9:54AM
I love all the VW reliability FUD. It keeps most dealers from unreasonable markups if any and whiners out of the driver's seat. Do you really think a Honda Fit is worth 19K after dealer markup, when you can get a screaming GTI for 22K? Hey if Honda, Toyota, Nissan or any automaker was as reliably as most want you to believe they would have such large service bays.
And no, all service isn't just oil changes. Think about that as you VW bash to your hearts content.
hidden_hunter @ Jul 24th 2008 9:55AM
The thing is the overall cost of every car is going up, commodity prices are at record highs (look at the price jump on metals) so i wouldn't be at all surprised to see other manufacturers following suite.
Gstill @ Jul 24th 2008 10:36AM
VW is already near the most expensive in nearly every class. And the Tiguan, no matter how good a car it is, is still priced way over its competitors.
garth @ Jul 24th 2008 10:49AM
I was wondering how many cars they will have to sell to turn a profit from their new $1Billion factory in TN?