VW's Jacoby outlines future U.S. product strategy, plans to take over the world
Volkswagen's Stefan Jacoby has his sights set on turning the German company into the largest automaker in the world. Oh, and he also plans to turn a profit in the process. Perhaps someone should remind him how that's gone for Toyota and General Motors over the last few decades? Just like any proper plan to attack the global automotive market, VW's strategy includes introducing new models aimed at the heart of the market, including a new American-made midsize sedan targeting the Toyota Camry, Honda Accord, Chevrolet Malibu and Ford Fusion.
In fact, Volkswagen aims to refresh its entire lineup by 2011, and that product renaissance will reportedly entail a revised New Beetle and Jetta that are specifically tasked with catering to American automotive tastes. Also in the pipeline is a new seven-seat CUV that will go head-to-head with the Honda Pilot, Toyota Highlander and Chevy Traverse, though a pickup apparently isn't in the cards. We're not sure where that leaves the automaker's subcompact Up!, but Jacoby did mention that smaller models are under consideration.
Of course, if VW is going to play on the same level as Toyota and the rest of the gang, quality is going to need to be up to snuff, and that's something Jacoby says the automaker is working to improve. The trick will be accomplishing all of these assorted goals while maintaining VW's status as a desirable nameplate among image-conscious buyers. "It's not our intention to make VW a boring brand," he says. Pretty ambitious plans... what could possibly go wrong?
[Source: The Detroit Free Press]
Reader Comments (Page 1 of 3)
zamafir 10:36AM (8/27/2009)
If anyone has the economies of scale and platforms to give it a go it's vw, best of luck to them... though the mentioning of quality (many a US issue) in the same line of thought as world's biggest automaker seems odd. In the rest of the world VW doesn't have the same fairly negative image autoblogs US based commenter’s have.
Also I'm a little confused why autoblog neglected to mention the Up! being planned for US release, if we're discussing us product strategy, let's focus on that primarily in the synopsis, then get to the toyota pedestalling and vw quality slighting a little later.
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Alex 11:37AM (8/27/2009)
I just don't understand why so many auto manufacturers (and many companies for that matter) have a goal of being the biggest in the world. Does the Illuminati award some super secret prize that only high ranking execs know about?
What's wrong with being the best at what you do and letting you size grow as a result?
I guess this is why I'm not in business management.
zamafir 12:44PM (8/27/2009)
They've already done that. Look at their most profitable brands. I'm with you though, volume is pointless without maintaining margin, that's what sent GM to the welfare line, I think were VW is marketedly different is their profit. Which is what makes the writing of the synopsis so bizarre, Us product strategy is a minute part of VW's global growth goals, they'd love to grow sales here but they're not as dependent on North America, statistically their smallest focus for a decade or so, than they are in markets they dominate, Germany, Europe, China. They'll continue to depend on the latter for the bulk of growth (and the developing world) and to some extent the US.
Where GM sacrificed margin to simply be the largest, and destroyed themselves doing it, and where Toyota has seen large quality drops as a result of having little room to eek out a bit more, VW may just prove a different animal. They have lots of room to improve production (as evidenced by the cost savings and lack of quality cutting in the MkVI golf) and have no issues staying resolute with their sales prices to insure positive bottom lines.
Of course, the major difference between GM, Toyota and VW, the one everyone here likes to ignore because we just focus on ourselves, is VW has NEVER been dependent on the US for the bulk of their sales, growth , or financial stability. So for the first time in a long time, we have someone who could essentially cease all US operations and be even more profitable (again, noteworthy, Toyota posts their first loss in forever, VW’s still making money). So yes, there is plenty of reason to expect VW’s growth to be different than GM’s foolish bigger is better at all costs or Toyota simply reaching synergies of production with no room for shrink.
audi_arena 1:04PM (8/27/2009)
@Alex- I totally agree. I can understand that execs would want thier reputation in the press to be as ambitious as possible because I guess it builds investor confidence, but it seems like these guys truly believe the stuff that comes out of thier mouth.
I also think they have gotten the cart before the horse: As alex suggests, you don't achive greatness by striving for the end result, but instead it is a byproduct of being the best at what you do.
"real winners forget they are in a race, they just love to run"
zamafir 1:23PM (8/27/2009)
"alex suggests, you don't achive greatness by striving for the end result, but instead it is a byproduct of being the best at what you do."
by that token I take it you do not consider the veyron great?
As the seminal car (along with those which share it's focus who followed, Gt-R, et-al) which transitioned our thinking from the old murray school to the current. It would appear carmakers simply humming along as they did decades ago 'being the best at what [they] do' isn't working so well in today's market due to the complex changes in everything from emissions to material prices.
I’m not convinced VW sat down and said ‘guys, let’s pull a GM and Toyota’ but rather ‘guys, we’re pushing Bentley, Bugatti and Lamborghini as far as we reasonably can in regards to volume without diluting the brands completely, in this recession even our Audi buyers are much more price conscious so we don’t have a tremendous about of room there to increase costs – aside from bringing new models to the market to address niches we’ve ignored, what’s the best way we can increase profitability and our bottom line world wide’ - apparently the answer is ‘sell more of our bread and butter brand’. The world leader bit seems more a byproduct of the shrinking market, GM and Toyota’s floundering, VW’s platform synergies, and potential to grow in places they’re not already dominating. If they weren’t already selling the most diesel cars in the country, and weren’t constantly approaching new avenues, I’d take the a lot less seriously on a global scale, but their numbers, their focus, and their profitability all seem to point to a different conversation then we’ve heard the last two times around.
HotRodzNKustoms 10:36AM (8/27/2009)
Don't worry he'll try to invade Russia and get stopped by the Russian winter
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Mike 11:05AM (8/27/2009)
That's funny. The winter would have to be it, because there isn't a decent car coming from the eastern front that I can see.
Aki 2:26PM (8/27/2009)
ROFL, hilarious WWII reference
ed 7:46PM (8/27/2009)
They need two pick-up trucks if they want to compete in the US market. And a REAL VW minivan.
Avinash machado 10:40AM (8/27/2009)
Being overambitious and overconfident can be quite harmful.
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Judy Zik 12:34PM (8/27/2009)
Agreed. Everyone who tries to be #1 in volume forces their company to grow too fast and loses sight of Quality. They end up selling decontented driving appliances at razor thin margins (or a loss) to keep the volume up. For a company like VW who has yet to actually crack the whole quality thing this could be a disaster. It isn't just autoblogers. Have a look at the metrics from any of the companies that track automotive quality. VW builds great driving and looking vehicles that unfortunately don't stay that way for long. They have the platforms to leverage and there is no reason why they can't increase their presence in North America. But they really need to focus more on quality than volume so that people are willing to pay a premium for their vehicles.
The Other Bob 11:02AM (8/27/2009)
"...and that product renaissance will reportedly entail a revised New Beetle and Jetta that are specifically tasked with catering to American automotive tastes. "
So if the cars are tailored to American tastes, doesn't it lose the character that makes a VW, a VW?
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zamafir 11:15AM (8/27/2009)
Generally speaking, yup, that's their main concern. the sort of volume sales they want always come at a reduction of driver involvement and insulation from the passion of driving, it's the same response we get from BMW when asking why the new M3 is less visceral and engaging and more insulated than it's predecessor, the pursuit of greater volume sales.
Like BMW though, vw has a little higher level of refinement and quality than it’s competitors so hopefully that watering down will still keep them above bar.
alex 11:18AM (8/27/2009)
agreed. and to be the biggest automaker in the world, you have to be mainstream... most VW owners i know like to think that they're a little different (and better) than everyone else... the kind of people who go to art gallery openings (unless of course they drive a beetle... then they're just a 16 year old girl)
Alex 11:41AM (8/27/2009)
That right there is the kiss of death. Any company that tries to cater to the "tastes of the American consumer" immediately looses credibility with the enthusiasts. Say what you will about the small size and small buying power of the enthusiast, but think about it. You are your friends' car guy. Who do they talk to when looking for a new car? You.
fixitfixitstop 12:53PM (8/27/2009)
I thought they learned when they over-"chromed" the Jetta and Passat. I guess I was wrong.
zamafir 12:54PM (8/27/2009)
@ Alex:
Again, It's going to take a lot more credible argument for that pov to stick. Vw’s not profitable in the US, and they’ve remained unprofitable courting enthusiasts. While I love it when people ask me about cars, the reality of the US market is most consumers don’t base their buying decisions on the words of their enthusiasts friends. If they did we’d see nothing but MS3s, GTIs, STIs, and Toyota would sell nothing.
What vw is shooting for is a couple models just for US consumption, just for the camry crowd, produced here, and hopefully profitable here. Those models will do nothing to tarnish VW’s reputation in their most important markets and honestly do nothing to affect vw ‘enthusiasts’, just as the Touareg, Tiguan and Routan haven’t negatively affected GTI sales. Porsche’s hedge fund bs aside, and BMW’s watering down of the M3 have taught us courting the less enthusiastic main stream market can be a worthwhile proposition. Alright, maybe BMW’s a bad example, the M3’s softer but still stupid fast and the rest of their lineup is loosing most (if not all) focus. But the point remains, a cheaper, less stiff passat+ sized car along side the R20 (if we ever get it), blusport (if we ever get it), GTI et-al isn’t going to send enthusiasts’ packing, just as the Mazda5 hasn’t sent enthusiast packing unwilling to consider the MS3, so too will this car not have any effect.
Shawn 11:03AM (8/27/2009)
Ummm...to take over the world maybe Toyota & VW can form an alliance with Fiat..
Yeah yeah yeah...bad joke I know.
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k.w.a 1:18PM (8/27/2009)
i don't know if GM and its alliance with Vauxhall can win this time around...
Shawn 1:25PM (8/27/2009)
Yeah, but you know Fiat is gonna switch sides... LOL