Marketing 101 will first teach you about "Brand Identity" - which is extremely integral to US markets - it's why middle-income consumers will pay $400 for a purse. Brand identity is what made VW in the past... and it's what is breaking them, now. People are identifying with the VW brand in very different ways than in the past. VW used to be fun, trendy, reliable, sporty and european... And this made them very popular and desirable. Now, it seems they are working to dismantle that very brand identity they worked so long and so hard to create.
The biggest mistake they made was to decide that VW and Audi would directly compete with each other, and VW would move upscale, and Audi would be "Sporty". In a market all about brand identity, nobody is going to buy a $65K+ VW Phaeton. In a market all about brand identity, why try to "force" a brand to be something it's not perceived as??? Why??? VW is NOT seen as a competitor against BMW and Lexus and MB... why try to force the issue? And why not focus all that effort on the brand you ARLEADY have worked so hard to identify in that market - Audi.
VW should do consumer studies, and find out what people like most about VW, and build upon those strengths to re-establish and strengthen their brand identity into something unique that people desire. Right now, their brand identity is littered with mistakes like the Phaeton, or poor customer service, or the over-priced Touareg, or recalls and low reliability and resale values. These characteristics will not excite anyone. It's almost like they took the US market for granted, and expected to "tell" the US market what it will like... a very bad case of hubris. And the future is not any brighter - a VW pickup??? Come on... what about VW correlates to a pick-up?
VW has been seen in the past as an affordable method to acquire european performance and reliability. That is how they need to re-build themselves. That is what will excite buyers. Get to your roots. Brand identity is everything.
Before any "moonraking" takes place, VWAG must begin to address their exorbitant internal production costs, develop a better strategy to deal with the current gap between the Euro and Dollar as well as the high cost of doing business in the US, and finally embrace the unpredictable and often frivolous behaviour of the US consumer. They have clearly failed in their long-term currency hedging and Puebla/Curitiba is just barely keeping them afloat on the product side. ...
First of all, Euro was supposed to be higher than US in the first place. That's the reason for establishing the Euro.
Secondly, if American behaviors change all the time like you've said (i.e. unpredictable), I guess Toyota and Honda don't know what they are doing.
Everything I read so far seems to be good stuff, but I think VW could bring the eurovan with some major inovations (kind of like Caravan fold away seats, dvd entertainment, etc). Also put the TDI in the eurovan. Don't bring a "minvan," bring the originality of the eurovan, with a lot of inovation. I think VW could come up with something to crush the Caravan. Also syncro would be nice. If VW would bring it I would buy it. The perfect set up for me would be eurovan with tdi and syncro, and a golf or polo with the same. Both would be functional and efficient.
Legions of Vortexers have been echoing the same general sentiment for years now, and they're right: Volkswagen has lost its way in the US by erroneously focusing on the higher-end of the market to the detriment of its lower-end offerings.
Volkswagen obviously wants to emulate the success of Toyota and Honda in the US market, since they are seeing the dollar signs associated with that sucess, but they don't want to harm the brand advantage Volkswagen has in the US because of its European car appeal. I think that the shizophrenic position of the VW brand in the US today will kill it if nothing changes; its impossible to satisfy both the Honda/Toyota fans, and the BMW/Mercedes fans with the same products.
So, the best way to have their cake and eat it too is to bring another one of VAG's European brands to America to occupy the bread-and-butter Honda/Toyota market position, while allowing the VW brand to continue its entry-level European brand position. The candidate to fight the likes of Honda and Toyota? Skoda.
Could a new brand called Skoda ever make it? What the heck is Skoda anyway? To that I ask, who would have thought a "strange" brand name like Honda or Toyota would ever work against the likes of Ford, Chevy, and Chrysler? Exactly.
VAG could let Volkswagen continue its upmarket move, and isntead of trying to please the American public while diluting its European flavor, they could keep importing all-European cars and focus on competing strictly against brands like Mercedes and BMW. Meanwhile, VAG could bring the Skoda brand to the US as a bread-and-butter competitor.
Skoda's clean, simple, conservative styling lends itself well to both "vanilla" sedan and SUV applications. If the less-exciting new Jetta were a Skoda instead, and the new Jetta V were instead designed as a straight-up 3-Series/TSX killer, wouldn't VW die-hards be jumping for joy? I think even Skoda's current names, like Fabia or Octavia, are well-suited to the entry-level market. Fabia vesus Civic, Focus, or Corolla? Octavia versus Accord or Camry? Fine. Focus on building Skodas as back-to-basics, perhaps open up a plants in South America and the United States to ensure lower production costs than the VW brand has, and make darned sure that these cars compete with Honda and Toyota in reliability and mechanical quality. The best part? Proper marketing could ensure Skoda still gets the European car mystique.
Potential beginning US lineup for Skoda: - A-class: Fabia hatch/sedan; xB competitor based on Roomster concept - B-class: Octavia hatch/sedan/wagon - C-class: Superb coupe/sedan/wagon - Add a Concept R-based roadster, like the Sky/Solstice twins - Minivan: Suberb/Passat-based (Odyssey/Sienna) - Small SUV: Octavia/Jetta-based (CR-V/RAV4) - Big SUV: Toaureg-based(?) but simple and decontended (Pilot) - Pickup: Small lifestyle-type pickup, or Frontier competitor - Large Puckup: Simple, heavy duty worktruck a la Nissan Titan
Meanwhile, the Volkswagen brand in the US could breathe a sigh of relief, knowing that vanilla sales would be going to Skoda isntead of vanishing, and focus on stregnthening their German car status by eschewing anything that wouldn't work with that German brand character. No SUVs bigger than the Touareg, no minivans, more performance, more AWD, more focus on the driving-experience, and less focus on pleasing Joe Car Buyer and Jane Soccermom with nonsense like extra cubbyholes and in-car entertainment. Some ideas:
- Build a funky-but-cool microcar like the MINI Cooper. I still say a New Fridolin would be perfect in this application - Eliminate Golf, except GTI (Octavia hatch built off Golf) - If they keep the Beetle, base it on the same chassis as the New Fridolin, and ensure that it's a thoroughbread German car like the MINI Cooper - Build the Jetta exclusively as a 3-Series killer. This means attractive coupe/convertible, wagon, AWD and V6 options, and a powerful performance model. - Position the Passat as a 5er/E-Class killer, complete with CLK-esque coupe/convertible, sedan, wagon, and another performance model - Keep the Concept R-based roadster on track, and add a performance version - Eventually bring the Microbus fully intact in spite of the added expense - Make the small SUV every bit as offroad-worthy as the Touareg (IOW real 4X4, locking differentials, etc.) but with more utility and lifestyle features (like the X3). - Keep the Touareg as is, it's perfect against the X5, XC90, etc. - Keep the Phaeton, but employ Audi Space Frame to reduce weight to managable levels, and ensure that it provides an excellent driving experience. Offer a Concept D1-esque Fastback to stir things up in the segment, and an AMG-esque performance model.
asurroca.com Double Yellow 2002 Beetle 1.9L TDI DIESEL Shadow Blue 2007 Jetta 2.5L evil gas POWER
It seems that some people here are familiar with the other VAG offshoots in Europe, but if it would come to the US market 95% of the publick would not know what these brands are. And when people start bringing the background of the companies, such as Skoda into question it would be hard to comptete in the US market. If I recall correctly Skoda is a former Checkoslovakian (Check and Slovakia now) and they were a part of the Iron Curtain back in the day. The marketing departments of the competitors would have a field day advertising that.
Skoda and Seat are well established brands in Europe and VW is able to charge "well-established "prices for these supposed entry level cars. If brought to the US I dont think that they would be able to undercut the VW prices by much, $2000 tops, and then you would have too much of a competition with VW. They would have to start off very low (like Hyunday or KIA) 10 years ago. Now you can see where those companies are. I dont think that VW has the patience for that.
As for the Audi, VW question. I dont think that there are too many people that know that Audi is owned by VW , except for people that are on forums or reda at least a car magazine or two.
Last, the Lupo and Polo question. Man, the US market will not accept those cars willingly. Maybe in 10-20 years. The Mini is successfull, because it had its history. And all the poeple that demand a Polo would really have to step up and get one. As seen on many other novelty items, people always say to bring something over and then end up not buying it, because the price or the options are not correct or to their liking.
This is definetly a great topic, so keep it going. I saw a show that said that Smart is bringing over their line. If that sells, Polo and Lupo will not be far away.
I just solved the whole moonraker problem. If VW wants to be more succesfull, give all the celebs that the main stream kids like (Paris Hilton, Puff Daddy, Ashton Kutcher and all the other celebs) a Phaeton, Touraeg and let them "trick it out" and they will have a much better selling rate than if they try to listen to people and see whet they like.
Vdubed had it right earlier. VW does need a couple new models to bring more spice in the mix. The T-reg pickup makes sense, especially when you look at the rave reviews the Honda Ridgeline is already getting.
VW doesn't need to sell out with cheeseball Camry's. German classic, not Japanese plastic.
'06 A3 DSG, Sport, Garnet Red / Gray; '99 Porsche Carrera 2 Coupe, Silver over Black; '03 Eurovan Westfalia, silver/gray; '62 Bug Cabriolet Cal Look, 2110 ~150hp. O
On the contrary, I believe VW needs to bring models to the US. I am not to sure that VW should start with the the pick-up trucks though. I believe VW has to start from ground to up (e.g. mini-van first).
VW has many other models in Europe. The problem is not about currency. VW has factories in Mexico and Brazil as we all know. The problem lies on whether production switch can be done on time. As we are here now (in the US), it proves that VW is giving sh$t about it. See how late the Golf V is coming, no Touran, and no Golf Plus. Let's not even take any model, engines don't come here on time (e.g. 2.0 TDI). It's a problem of integration.
I'm all for volume. But, give us VW bums a model or two that stick with the old philosophy. GTI, “R” cars, and a lifestyle (Touran) would be quite nice
Quote, originally posted by Meaney »
Quick math says 400,000 kms is only like 5 miles, I'm not impressed.
Legions of Vortexers have been echoing the same general sentiment for years now, and they're right: Volkswagen has lost its way in the US by erroneously focusing on the higher-end of the market to the detriment of its lower-end offerings...
- Build a funky-but-cool microcar like the MINI Cooper. I still say a New Fridolin would be perfect in this application - Eliminate Golf, except GTI (Octavia hatch built off Golf) - If they keep the Beetle, base it on the same chassis as the New Fridolin, and ensure that it's a thoroughbread German car like the MINI Cooper - Build the Jetta exclusively as a 3-Series killer. This means attractive coupe/convertible, wagon, AWD and V6 options, and a powerful performance model. - Position the Passat as a 5er/E-Class killer, complete with CLK-esque coupe/convertible, sedan, wagon, and another performance model - Keep the Concept R-based roadster on track, and add a performance version - Eventually bring the Microbus fully intact in spite of the added expense - Make the small SUV every bit as offroad-worthy as the Touareg (IOW real 4X4, locking differentials, etc.) but with more utility and lifestyle features (like the X3). - Keep the Touareg as is, it's perfect against the X5, XC90, etc. - Keep the Phaeton, but employ Audi Space Frame to reduce weight to managable levels, and ensure that it provides an excellent driving experience. Offer a Concept D1-esque Fastback to stir things up in the segment, and an AMG-esque performance model.
What he said. As far as introducing Skoda to the US market, look at what Kia did. When they first started selling cars here, people laughed. Their 10/100,000 warranty got a lot of people behind the wheel though, and look at where they are now. Something to think about VAG. Oh, and give us a 4motion option on every single VW model you sell in the US. How many times does this need to be said before you'll listen?
Quote, originally posted by TWinbrook46636 »
Unicorn stocks have not fared well during the economic downturn. Centaur stocks would be a much safer bet.
Quote, originally posted by StoicDude »
Jeez, your typing skills and grammar are atrocious. When you are explaining a technical problem on a forum, please do it in paragraphs and with punctuation.
As for the Audi, VW question. I dont think that there are too many people that know that Audi is owned by VW , except for people that are on forums or reda at least a car magazine or two.
As do they know Toyota owns Lexus, Nissan - Infiniti, Ford - Jaguar, Volvo, Rover, Chrysler-Mercedes yet people still flock to the premium brand.
Why did VW try to do things different? There was already proven methods right in front of them on how to do so. Audi is their premium brand. Just like Acura is Honda's. Was it their intention to start dropping the lower end cars eventually and market them under SKODA or SEAT? Who knows, but whatever it was, it has failed miserably and with the current line-up set to sail, outside of the GTI and Toureg, looks like more rough seas ahead.
I'd love to see VW rekindle the New Beetle a bit with Mini-style attitude. The whole "Let's Motor" approach, the tons of cool options and accessories, starting out at a lower price, maybe giving it some sportier suspension packages.
The Mini attitude would really be a great direction for VW to take the car.
I hope VW doesn't become Americanized. The last thing Americans need is more SUVs/Trucks. VW should focus on quality and customer service (I've never had a problem with either, however).
I'm fine with the length of the current warranty; but for the prices we pay on service, parts and labor at dealerships, it would be really nice if VW had the 4 years/50000 mile free maintenance plan like Audi of America. Asside from quattro, this is one of the reasons why an Audi will be my next car.
VW could also improve sales in the US market by offering a well-tuned hybrid vehicle(s). I would love to see a German gas/electric hybrid!
VW should not bring in stripped-out cars. They don't have the volume to go through the trouble. No AC? no way. A 1.2 Lupo? Not in this country. Look at MINI. Small car, premium content. American expectations say that the car must have AC, extra airbags, etc. The MINI One doesn't exist herre for a reason.
All the Scions are "fully equipped". Heck, even the Kias and Hyundais have pretty good standard feature lists. VW won't sell anything if it can't keep up with a Kia feature set. It may make them worse for autocrossing, but the "regular people" won't care. VW does not need to be competing for the rental companies needs for underpowered, decontented junk.
The Microbus concept was seriously flawed. It looked funny and would have cost too much. Would you pay $40k for it? A solid new minivan would be a great idea, though, as it's a lucrative market for quality products.
Moving too far upmarket was a bad idea for the North American market. It left VW without an entry-level. Add to that the gigantic quality issues with coil packs and windows, and it puts VW in the same boat Jaguar was in a few years ago. Sure, it's a nice car, but who would buy one?
I've heard it said before that "There's no accounting for taste." This seems to be part of the problem here. VW is not only positioned as a "Tweener" brand in terms of the types of cars they build, but also in terms of whose taste they want to appeal to.
In the past, VW appealed to people who wanted a fun car first and transportation second. Think Golf (rabbit) GTI, Scirocco, Corrado, et al. These cars were not the best choice when it comes to interior room, reliability (think electrical, etc.) and noise, vibration and harshness. They are, however, really fun!
Now, VW, in America at least, is between this position and one that takes after the Japanese blueprint. Their cars 'kind-of' appeal to someone who wants something fun and slightly sporty. They also 'kind-of' appeal to someone who wants a bigger car with more amenities that will get them to work and the store with no fuss, fun or no.
VW needs to continue to move in the bland mass appeal direction, then introduce a new brand to pick up where the fun cars that they used to make left off. Its unfortunate that the rest of America wants something bigger, heavier and blander. Its unfortunate that the rest of America wants to take their car to Jiffy Lube. What can you do?
And when people start bringing the background of the companies, such as Skoda into question it would be hard to comptete in the US market. If I recall correctly Skoda is a former Checkoslovakian (Check and Slovakia now) and they were a part of the Iron Curtain back in the day. The marketing departments of the competitors would have a field day advertising that.
While the general perception among Americans is that Soviet cars and other products are terrible, I don't think that Eastern Europe has been tarred with the same brush. Just look at the success that CZ (Czeska Zbrojovka) Firearms are having in the US as a lower cost, high value alternative to the higher priced Western European brands like Sig and HK.
VW needs to drive the market with new products that excite, capture, and create a following. Responding to the market results in boring, average, mindless-mass-directed vehicles. Hey, that position is great for GM, but this is VW!
VW needs a comprehensive plan: 1) Entry level – two prong attack (a) Lupo/Polo like car for first time new car buyers, should be affordable, economical to operate, and fun to drive. Target price between $12K – 18K. (b) And, first-time buyers can purchase VW coming off lease from the nation-wide rental fleet. 2) The starting family market segment. Position the Golf in the $15K - $22K range with a healthy mix of 2-dr, 4-dr, FWD, AWD, DSG, 6-speeds, TDI, and 2.0 turbo (drop non-turbo 2.0 altogether in the golf) include a cabrio and the GTI in the mix to be the flashy, attention get-them-in-the-showroom leaders. 3) Affluent family market segment. Target the Jetta and Passat to go toe to toe with the likes of Volvo’s S40, V50 and S60, but stressing German engineering, value, performance, fun, and a touch of luxury. Base Jetta should be a 2.0 turbo FWD and/ or the FWD TDI. Mid range = Jetta a FWD 250 (or more!) hp 2.0 turbo (optional AWD). Hi-end: AWD Jetta w/ 3.2 VR6 and a FWD VR6 Passat (similar price, different segments, Jetta = performance+fun, Passat=performance+luxury). Top of the line = AWD 300+HP 3.2 turbo Jetta and a slightly more expensive 300+ HP AWD Passat (offer DSG and 6-speed). Go after Audi, BMW, Subaru WRX, Volvo, Lexus, MB at this level. 4) Niche vehicles: Golf R32 turbo, Beetle cabrio, Concept R, a new Corrado or other Coupe based on the R32 awd platform, AWD dune-buggy-beetle. Show stoppers, got to have ‘em type cars. 5) Practical vehicles: new microbus AWD VR6, perhaps a small pick up based on same platform and also a cube-like car similar to the Element. 6) Just to have in the mix: Tourag, smaller ute based on the AWD golf platform.
Overall, offer AWD as an option on each model (except, perhaps, the entry level). Offer TDI or other hybrid on several models. Lead with the strengths of fun, German precision engineering, and value. Energize the mix and watch the sales figures climb (Hey 5,000 R32 w/ no advertising was pretty good – suggesting if you make ‘em we will buy ‘em.)
Finally, I want to be able to rent these great cars when I travel in the US!
I would like VW to bring over a Mini-Cooper competitor. Small, sporty yet great on gas. Also, give it more engine options like a turbo diesel or even a Hybrid Diesel which woulkd give it a great niche!
All in all I'd love to see reliability issues comparing with Toyota and Honda. I love my VW but still after 2 years, wish it would be as trouble free as my old 1988 Acura Legend.
Speaking of which, I see first generation Acura around all the time where as late 80's VW's, I hardly ever see except on Ebay.
I'll add my $0.02 (or maybe I should go upscale with my comment and make it $2.02?)
It's my opinion that VWs move upscale is a bad idea. As has been said over and over again, that move has alianated the core of what makes a VW a VW. When I think VW I think: value, quality engeneering, relyability, efficiancy(fuel/use of space/cost) and querkyness.
The line up: They need entry level to get younger and less affluent buyers into a VW. It should have a sedan and hatchback versions avalible, if it does well than start offering a small wagon as well. It has to be a well built relyable car that is decently equipt. Offer it with a decent sized option list and a expecially a TDi option. Market base models to the younger/less affluent buyers and also offer a TDi model with some extra creature comforts marketed to more affluent buyers looking for a small, efficiant, relyable car for commuting. Make sure at least one model comes with a limited list of features and a low low price point
Keep the Golf/Jetta line keeping it in the mid/lower price range with a wide range of options and engine/transmission choices. Be sure to have lots of safety features come standard. definately offer 4motion across the range, and market that as a safety feature. Market the jetta/jetta wagon to young families, offer 'kid friendly' options like integrated rear side window sun shades, storage cubbies for toys, eazy to clean seats/carpets. Add little interesting extras that help it stand out from other cars in it's class. one idea I had was a jumpstart/aux power source/tire inflater/flashlight thing that has a special 'dock' in the trunk that keeps it charged(when the engine is running). The golf should be marketed to more affluent singles and the enthusiast market. Definately offer GTi/special editions like the R32 etc on the golf platform...
Keep the passat as the top end VW (ditch the phaton, or make it an Audi) Keep the passat aimed at older families/empty nesters.. when marketing to older families market upscale features for older kids. Like rear heated seats/rear heat/AC vents controlable by rear passengers. Offer an in car entertainment system for the rear seat passengers. Passat should come *very* well equipt with only real luxury options left on the options list like leather/entertaiment package/cold weather package/etc. Keep this car aimed towards saftey, relyablity and value. Let the Audi A4 catch the super luxury/sporty people.
The Van... I think VW needs two minivans, a smaller value line van, that is feature packed, lots of safty features with options that make it stand out(4motion comes to mind), definately offer it with a TDi for for families that want a fuel efficiant, yet versital family transport. Offer it with a wide range of models from super entry level that has a good price point, to a decked out model with all the bells and whistles. Optional 3rd row seating is a must. Automatic only, wonlt not bother with a manual tranny in this one... For people who need lots of space bring the Eurovan back, offer the european T5 here in the US. Keep this van as a well optioned higher end van with diesel and gas engine options, definately needs to have 4motion as an option with any engine. I don't know that there is a huge market for a manual transmission in this type of van, I know I'd prefer one with a TDi... maybe the DSG would be a good compromise(if it could handle it)? It *must* be offered with a pop-top weekender version and a full camper version. Has anyone seen the prices Eurovan pop-top and campers go for? it's NUTS! talk about resale values! there is a DEFINATE market there!
Truck: HELL NO! don't bother!
SUV: *sigh* it's enevitable, but yes I think VW should look into a 'cute ute' a small, well priced, efficiant(TDi) SUV. Maybe a beafed up version of the golf plus, caddy or jetta wagon (ala audi allroad) certanly would save some costs over building an independant platform... The toe-rag... that should have been left to Audi... I think it should go along with the phaton. (or move to the Audi brand)
As for bringing seat or skoda to the US... maybe... offer it as a value priced entry brand... it could work, but there is some very stiff compition in that market though. it would require a great deal of effort and it would not pan out for a good many years until the brand can make a name for its self here.
Master of the blurry photo! 2003 Passat 1.8t wagon 5speed 61k mi [shared daily] 1998 Dodge Dakota 5speed 223k mi [beater] 1974 Karmann Ghia auto stick convertable, 77.6Kmi [my baby] 1974 Karmann Ghia coupe 74k mi [wife's]
Volkswagen Needs to stick with their European roots and push to make great strides in quality, customer service, cost savings, shorter life-cycles and more diverse product offerings in segments they should be in.
They can start by giving us the fololowing models which will be an instant hit:
1. 5 or 6 cyl. Toureg TDI w/ manual transmission option. 2. Passat TDI w/ manual transmission ( wagons should be easily had as well ) 3. 4 dr. R32 / R36 models and Jetta R 4. Golf Plus 5. Touran or equivale nt minivan ( sporty! ) 6. T5 Eurovan ( 5spd. TDI ) 7. Audi S3 8. Passat R model 9. Available 4 motion across the board ( available with 5or6spd. manual )
That would pretty much do the trick as I see it... Anyone else agree? They don't need to reinvent the wheel, only sell the what we want here. I would take second and third jobs for almost any of the above vehicles if they were sold here. Until then, like the rest of us I'll either make what I want or keep one of the old ones that just can't seem to be replaced with a new one just right.
I would like VW to bring over a Mini-Cooper competitor. Small, sporty yet great on gas. Also, give it more engine options like a turbo diesel or even a Hybrid Diesel which woulkd give it a great niche!
They already do... it's the Beetle. They just need to make it drive better. The current Beetle is a pig compared to the Mini... the next Beetle needs to be smaller and have more design cues from the original. If it drives anything like the Mini, I'd buy one.
06 Audi A3, Sport/DSG, Arctic White/Black 04 Audi S4, Arctic White/Silver
First of all, Euro was supposed to be higher than US in the first place. That's the reason for establishing the Euro.
Uhmm, should this be true, it means the EU never intended to make its export goods or services appealing to both US and global markets. Should we believe they are that stupid?
The reason the Euro was established was to centralize and equalize all of the individual economies of European Union member nations in order be unified global trading partner. However, the harsh reality is that in the beginning, it served to make strong member economies weaker and weaker ones stronger... all at a price. Germany in particular is just now starting to recover from 4 straight years of 0 growth as Italy etc "get up to speed". The goal for the currency was to maintain a slight under-parity with the dollar in order to sustain profitable EU exports to the US and be in a good position for EU companies to hedge the Euro against other world currencies.
The problem in recent times ("Bush times"), is that the dollar has weakened in the face of a mostly consistent Euro. This is in part to the obscene US deficit, stagnant economy and expensive military boondoggles... something that the EU could not have foreseen to be as bad as it currently is. I'd be blaming president Bush before I'd be blaming anyone else.
The current Euro/Dollar woes are significant for US-based importers and are often neglected by consumers and auto enthusiasts that maintain their blind "market this product to me" mindset. Many small companies dealing in specialty German imports (like delicatessen goods, silverware - crystal etc.) are suffering and many have gone under as a result. VWoA is not immune, and are really lucky to be alive at this point given their massive losses on German product over the last 2 years. This also applies to any of VWAG Konzern products from Europe, so assumptions of ease in importing SEAT models or Polos or whatever... are fraught with financial risks.
I know what you're thinking. "BMW and Mercedes seem to be doing well given the weakness of the dollar, so whats up with VW?" The answer here is that BMW and Mercedes both have assembly plants on US soil. VW does not. The tax breaks and margins earned on the sale of US-made BMW and Mercedes product helps to offset the losses on their German imports. Sure, VW has Puebla and Curitiba that "sort of" is the same, but Latin currency issues related to local inflation means that the margins are smaller with higher risk. That, and the travesty of VWAG (wrongly) assuming the outgoing A4 platform would have staying power and therefore decide there was no need for simultaneous global tooling of A5. Big mistake.
Quote, originally posted by psychoart »
Secondly, if American behaviors change all the time like you've said (i.e. unpredictable), I guess Toyota and Honda don't know what they are doing.
What's your point? Is it some awkward manipulation of my context? Indeed, Toyota and Honda have unlocked the secret to successfully pander to the whims of American consumerism. They apparently have no business culture, overall culture or principles against doing so, as it has made them extremely rich and powerful as car companies. German marques and VW in particular are mired in what many analysts here believe to be a business culture that resists change or pandering based on draconian principles that result in under-performance related to others. Within this, a German model is never to disappear or fail. What analysts and consumers don't realize is that part of VW's brand identity in the US/CDN is that "Volkswagens are not for everyone" and that they have no intent to be as big as Toyota or Honda here .... really a slap in the face of conventional capitalism where winners are everything, but ultimately a typically Teutonic German way to think. Don't forget, we're talking about a global player that traditionally has neglected and angered its worldwide stockholders, regardless of individual market success or failure. Why should the US market be special to them when they have a strong captive home market, but behind the scenes struggle with an outdated business model nonetheless. In this light, the whole "moonraker" project really shows hard VW is trying to come to grips with cultural and business model paradigms. While we should give them credit, it may very well be a matter of "be careful what you ask for"
I believe that VWAG does indeed "understand" the US consumer by simply witnessing the market activity here and contracting countless market studies over the years. But unlike the Asians and Domestics that subscribe to the accepted chant in the US that "winning is everything", VW's intent is to exist, as it has been, as a unique alternative. With a cult status born out the irreverent nature of its products that began with the original Beetle, this strategy has a major flaw in the pure capitalist sense, and that is low margins based on low volumes relative to other US players. This is a tough, long-term business model to justify (with VWAG having to subsidize much of VWoA's operations) and it's time that both find a way to grow mainstream acceptance without alienating exiting customers. The new Jetta is an example of just such an attempt, and we've seen the volatile reactions here as evidence. What is not known to many is that the new Jetta is for the most part a product of an in-depth collaboration between VWAG and JD Power, specifically tailored for pandering to the desires of US consumers. As such, many "typical" VW detail design features have been altered (like the standard driver's power backrest - no knob, improved safety belt height adjustment action, separate cruise control knob as on Audi - because no complaints on Audi... and many more). Point is, this is a lot tougher nut to crack than many imagine, given the nature of the US consumer. Remember that you "cannot please all the people all the time" and one need look no further to the reams of enthusiast rhetoric in vortex forums as proof.
In the end, before anyone dreams about new product or accuses VWAG of intentionally depriving US consumers of all the goodies found in other markets, there are many critical things that affect and even restrict the manner in which VWAG performs its business here... and that these things often do not affect domestic competitors in particular, and are not entirely relative to Asian competitors. Very much a matter of "what comes first, chicken or egg", I'll instead suggest VWAG take a closer look at repairing/optimizing its current VWoA import only business model before it considers any new product in excess of the current long-term commitments for 2007 (A-SUV, Minivan etc.).
So, where does that leave us? A pickup won't happen as long as the US 25% "Chicken tax" tariff is in effect. Even if built here, the market is saturated so volumes would be low. Low volumes mean no margin. Only the Asians have the market cap. to cover failure here. I believe that those that subscribe to "winning is everything" and that a German automaker should fill all possible niches and holes between niches as created by the Toyotas and GMs of the world will be disappointed. The stubbornness of the German business culture is at odds with that. Ultimately and arguably, in order for VW to maintain it's current brand identity and at the same time show better market performance, it must build some kind of plant here for some kind of product that will sell with enough volume to offset any Euro/Dollar import losses, ....mmmm, just like BMW and Mercedes . The Polo would be a good choice to build here, but market studies, market saturation and past history (VW Fox) have shown VW to have wet feet in this regard, can't say I blame them. Regardless, only when VW has a plant on US soil can any product dreams be argued as valid... so long as it does not make them an appliance making monster like Toyota. So, who can answer this: How can VW find a way to build small volumes of unique VW product and be profitable at the same time?. It all comes down to developing a successful US business model, that in this case is a unique solution for a unique company as defined above.
I personally would like the VW brand to remain an alternative, not be for everyone, and not prostitute itself in the face of a competitor's size or brand image. If the original air-cooled Beetle's heritage is used in any context, it should be to not make cookie-cutter clones of top performers in a segment or niche. Winning isn't everything.
Cheers,
Juergen
"Professional driver on closed course" SpeedWerks Racing - 05/06 CASC Ontario Region GTA Champion 2007 DCSCC Autocross Champ Series - Top 3 Overall PAX Points 2009 DCSCC Autocross Champ Series - Street Tire H-Stock Champion, Street Tire Index Champion & Top 4 Overall PAX Points
It is too late in many respects to change what VW is and has been. That is the entry level European brand. Look at the rules-of-the-road heirarchy in the Autobahn on who gives way - VW-Audi-BMW-Mercedes-Porsche. Contrary to others belief, it is ALL about selling lots of cars and making lots of money. VW would not succeed in trying to be generic Toyota, but it is an option that should be on the Moonraker table as a consideration. Hopefully they won't go that way.
It is my belief they can sell many more cars and keep being the VW we love - a quality, well engineered and styled entry level european brand. First, they made a big tactical error in investing so much in Puebla. VW should have reestablished Westmoreland or another US plant. Many people buy a Toyota because it is reliable AND US made. Next, dump the Phaeton. It hurts VWs image more than helps. Not having a minivan has been a huge mistake. VW has been selling the Sharon, the Passat of minvans, for over 8 years now and has spit on the US for family capacity (forget the Eurovan). Now the Microbus is no longer planned for the US. Then they come out with the Toureg, which feels smaller than my Passat wagon. VW is missing the boat from 30-45 year olds. The Toureg should have been a CR-V competitor, and another three row SUV the more "luxury" SUV grabbing Highlander, Yukon, Pilot....buyers. Hell, even Subaru now has a 3-row SUV.
Finally, alternative fuels/hybrid. VW should have been here on this one. Toyota/Lexus is selling hybrids like crazy. If VW had matched Toyota's Prius with a hybrid Polo/Golf/Jetta, VW might be the king of low emission cars. Didn't VW used to be on the forefront of alternative technologies. They put it all in the diesel, and while that may be a brief help with the right particulate filters, its still will die with the gas engine. Even though we like family haulers/SUVs, there is a huge trend from buying gas guzzlers, and I think thats here to stay.
VW doesn't need a pickup. It would be a big mistake!
Finally, it has to be said again. The quality has a bad rep (although all mine have been great), and the dealers are awful. One week ago I walked into a dealer to look at the Toureg. I said I was really interested and wanted a test drive. The sales guy asked me if I would buy it today, and I said no I was just gearing myself up with plans to trade in my wife's car. He walked away from me - WALKED AWAY! If I wasn't a VW fan I would never look at a VW again after that. Hell, maybe I won't ever look at a VW again after that.
VW is supposed to be a tweener company. Yeah, their models cost a few grand more - that's the point. They can command that premium because of perceived quality. But with the onslaught of quality issues stemming back for years, that perceived quality will erode and so will US consumers willingness to pay that premium. Quality is their first priority, not price point or segment matching.
Exactly. The one thing VW should be copying from Toyota and Honda are their relationships with their suppliers. Honda and Toyota don't just accept the lowest bidder, they work with their chosen suppliers years in advance of releasing a product to ensure a reasonable cost to Toyota and Honda as well as having a firm hand in the development and QC processes. VW's used to be considered bullet-proof. It's pretty hard to say that anymore.
VW's are more expensive compared to their supposed competitors, so I think there really should be an entry level car. How about the Polo? It would be less costly than the Golf/Jetta and could get younger buyers with no previous VW experience into the fold.... as long as they keep up the quality.
QUALITY. Not just engines that last forever (the major mechanical bits anyway), but go for six sigma on their suppliers parts as well!
Isaiah 26:4 Ephesians 2:8-10 Hebrews 3:12-14
"... freedom is sometimes simply another perspective away..." -Kutless
1. G2 - Updated version of the Karmann Ghia convertable. Light, small, nimble, cool. The Art Center did a design study on it and it was hot looking and highly sellable.
I saw several Karmann Ghia design studies in a German car mag about 3 years ago... it was hot !
Quote, originally posted by JTAshman »
5. Polo GTI - $15K (ish) with the 2.0T engine in it. Lots of VW aftermarket parts, very stripped down, no luxuries. Every kid in the universe is driving a Civc when a Polo GTI could crush them. They just ceded the young tuner car market to Honda and Toyota for no good reason.
What you say is true (i.e. to facilitate transactions in EU), but nevertheless, the Euro is supposed to come as strong if not stronger than the US dollar when it has been established. There's no denying in that. As the monetary value gets stronger, you have more purchasing power!!!
Everything is not perfect, there are the ups and down. The downfall of that economic game or monetary institution is export, and it has been part of the game. Nothing new. That is my point.
If you are familiar with a game, you would have known most of the moves by now. I'm sure that those EU politicians who have made such economic move ain't st*p*d like you think they are, thinking that the monetary value should be lower than the US dolar as they already were. The private sector will usually follow and try to profit from the rules that those politicians (i.e. nationalists) have laid out. Yet, who would have thought that VW is left clueless on how to work its global positioning
"As I stated above, VW has been a niche market auto maker in America's mind since the first one was brought to US soil. IMHO The past few years the company has gotten away from that market to the detriment of not only their sales numbers, but their customer satisfaction. The Mk4 lineup was the beginning of the end, and the MkV lineup is heading even faster down the slippery slope. No matter how hard they try with the Phaeton and the V10 TDI Touareg, Volkswagen will never be a direct competitor to BMW or Mercedes in America like they want to be.
Therefore they need to stick with what they used to know before they began this homogenization: building a good quality automobile at a decent price that appeals to a certain clientele. It worked for the first 50 years of VW's existence, but they turned their backs on it. Now we get massive recalls due to poor build quality or parts failures, huge numbers of consumer complaints, daily b!tching about poor customer service, and many of us who are getting away from their new product offerings and going back to what made us love VW to begin with: the older models.
VW listen up: Go back to what you've forgotten. It isn't about selling a million cars a year that look and perform like every other car on the road. It is about building good cars that your core owners love, so instead of telling everyone how much they hate their new cars, they tell everyone how much they love them. THEN new members will come into the VW family and old members come back home to it. "
Man, you saved me a whole lotta writing, my friend. Well put...VERY well put.
Please read my first published article in the February 2010 Chevy Enthusiast magazine (page 37; "Zora Arkus-Duntov And Five Easy Corvettes"). Link: http://www.amosautomotive.com/ Thanx!
“To one who has faith, no explanation is necessary. To one without faith, no explanation is possible.” - St. Thomas Aquinas
"I personally would like the VW brand to remain an alternative, not be for everyone, and not prostitute itself in the face of a competitor's size or brand image. If the original air-cooled Beetle's heritage is used in any context, it should be to not make cookie-cutter clones of top performers in a segment or niche. Winning isn't everything."
Geez, you guys are great! Real labor-savers! Thanx muchly!
I could write reams about this, but wouldn't add much to what has already been said, so you all can relax. All I'd add is my own personal VWVortex mantra of late, which goes like; Volkswagen must stop being the "horseman riding off in all directions at the same time". As Juergen elaborates above, the German mentality quite simply seems to be unable to accomodate the kind of all-things-to-all-people ubiquity of the Asian and American carmakers. VW can NEVER be this thing. The longer they persist in this current and futile quest to compete with what I think of as the "WalMart Carmakers", the further behind they will fall in the American marketplace.
It is the destiny of Volkswagen to be the "biggest little importer of automobiles in America", rather than what they are now, which is the "littlest big importer". FOCUS, VWoA...focus. Get back to the basics. Fix the nuts-and-bolts stuff. Set high standards for your people, from Auburn Hills to the local dealership. HOLD THE PEOPLE to those standards. Build relatively conservative, tasteful, durable design automobiles that stand the test of time. Make them AFFORDABLE, whatever it takes. Get off your butts and TALK to owners, and do WHATEVER IT TAKES to make them so happy they're giddy with delight over their Volkswagens.
Do these things, and the rest will take care of itself.
This concludes my sermon...
Please read my first published article in the February 2010 Chevy Enthusiast magazine (page 37; "Zora Arkus-Duntov And Five Easy Corvettes"). Link: http://www.amosautomotive.com/ Thanx!
“To one who has faith, no explanation is necessary. To one without faith, no explanation is possible.” - St. Thomas Aquinas
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Where can I find more info? Haven't heard of this one yet, except for the old Audi motors.
