Why buy a Volkswagen?

VW is intent on becoming the world’s largest auto manufacturer.  To achieve this lofty goal, the company needs to sell a whole lot more in the United States.

“The company plans to triple annual U.S. sales of VW, Audi and Bentley models to 1 million units annually by 2018 as part CEO Martin Winterkorn’s drive to overtake Toyota Motor Corp. and General Motors Co. and become the world’s largest automaker.”  Automotive News 9/18/09

Based on the VW brand’s 2009 sales (213,454), volume in the US will almost quadruple: “By 2018, VW wants to sell 800,000.”  Automotive News 1/19/09

800, 000 is a heck of a lot of cars for VW.  Especially considering that VW’s biggest volume year in recent memory was 2001, when it sold 355,648 units (in the 1970’s VW did sell roughly 500,000 units).  Many industry experts have questioned the wisdom and even the possibility that VW might sell 800,000 units in the US.

Volkswagen believes that it can sell 800,000 cars in the US by specifically developing vehicles to meet Americans’ tastes: “VW has concluded that price-sensitive U.S. consumers simply aren’t willing to pay for the extras found in a mass-market European sedan.” Automotive News 7/5/10

Consequently, the “new mid-sized sedan, which will be built in Chattanooga, Tenn., is supposed to be bigger and cheaper than the Passat that it replaces… VW wants to make its Passat replacement competitive with the mid-sized segment stalwarts — the Toyota Camry, Honda Accord and Ford Fusion — and thereby boost sales sharply.” Automotive News 7/5/10

This strategy is also evident in the new 2011 Jetta, which has been de-contented to make it price competitive with the Japanese.  The 2011 US version of the Jetta will have drum brakes in the rear and a torsion bar rear suspension.  The interior has also been cheapened to enable it to reach a competitive price point.  The European Jetta has been dumbed down to meet the needs of the “price sensitive” US customer: “European buyers will get a more costly and more upscale version of Volkswagen’s new Jetta sedan than North American customers.” Automotive News 11/1/10

This approach is being mirrored in the Company’s US marketing. When recently searching for a new advertising agency, the VW CMO offered the following rationale: “The Volkswagen brand needs to inspire our base of enthusiasts as well as reach out and captivate those in mainstream America.”  Automotive News 8/18/09

So, Volkswagens will be more mainstream in the US, larger, less expensive and less European, more price competitive with the Japanese marques.  While I am tempted to go on a rant about the dilution of the VW brand and the dangers of chasing volume (see my earlier blog post), let’s skip all that, and ask a simple question:

Why buy a Volkswagen that is designed to be competitive with the Japanese when you can buy the more reliable, better built products from Japan (or Korea or the US)?

Below is the latest JD Power IQS study results:

Note that Volkswagen is third from the bottom, ranked 31st out of 33 marques. Honda is 6th,  Nissan is 15th, Mazda is 19th, and even after everything it has been through Toyota is 21st, well ahead of VW.  A customer could also look at Ford (5th) and Chevrolet (14th).

Of course part of VW’s answer to the question is that the VW brand has a certain cachet that the Japanese or US brands do not.  I think that this has been true, customers (me for one) have been willing to overlook the quality issues which have plagued VW for years because they thought they were getting something special, a German engineered driver’s car.  Customers have also paid a premium for the privilege.

But now we learn that US customers are getting the de-tuned versions of the European products.  American VWs are tuned to American drivers’ tastes, rather than the more demanding European “standard.”

This “mainstreaming” of the VW brand may lead to increased volumes for VW but it will also result in increased commoditization, the Jetta’s loss of independent suspension and disc brakes may seem wonky to some, but those technologies dramatically effect how the car handles. If my new Jetta handles just like the Civic and the Corolla, I might as well buy either of them; after all they’re better built than the Jetta.

In the final analysis, this does come down to the brand and what the brand stands for, what its promise to its customers is. “Mainstreaming” the VW brand may generate volume but it will inevitably weaken the brand.

I recognize that ad campaigns come and go, but a brand’s positioning should be consistent.  In 1995, VW’s US management and their agency perfectly captured the core of the brand when they said:

“On the road of life there are passengers and drivers.  Drivers wanted.”

Not so much anymore.  Not mainstream enough.

Tags: , , , ,

33 Responses to “Why buy a Volkswagen?”

  1. click says:

    It’s going to be finish of mine day, however before end I am reading this
    enormous article to increase my knowledge.

  2. dental implants in West Los Angeles

    Why buy a Volkswagen? « McNaughton Automotive Perspectives

  3. celebrity Social media management

    Why buy a Volkswagen? « McNaughton Automotive Perspectives

  4. SEO agencies in Scottsdale

    Why buy a Volkswagen? « McNaughton Automotive Perspectives

  5. Bay Chiropractic And Rehabilitation Near Santa Monica

    Why buy a Volkswagen? « McNaughton Automotive Perspectives

  6. ¿Sabéis si lo de que el manga Dr.Slump se publicará únicamente en castellano, como vienen amenazando desde hace unos meses? Espero que este cambio les anime a publicarlo este noviembre en catalán también …

  7. http://www./ says:

    You mean I don’t have to pay for expert advice like this anymore?!

  8. p.s.: I’m not going to hold my breath waiting for the apology from you that I deserve. Somehow, I suspect that those three rarest words in the English language, “I was wrong,” haven’t sincerely passed from your lips to anyone else’s ears in quite a long time, if ever, and particular to ears that have the misfortune to find themselves attached to a white man’s skull.

  9. …Buy:Viagra Professional.Cialis Super Active+.Viagra.VPXL.Maxaman.Viagra Soft Tabs.Levitra.Cialis Soft Tabs.Viagra Super Active+.Cialis.Soma.Zithromax.Cialis Professional.Tramadol.Viagra Super Force.Propecia.Super Active ED Pack….

  10. How long before the ChiCom business start putting pressure on the Idahoan politicians to keep quiet about their human rights violations? Chinese companies will operate in Idaho in exactly the same manner as American companies.

  11. Probably the most strange thing in riding an electric bike (just like scooters) is riding without a clutch. At least in scooters you have something for your left hand to do.The people here who have already rode an e-bike didn’t miss the clutch while riding in town? If we have something like regenerative braking we should also have a way to disengage it when going down some road (a new clutch-like lever?).

  12. Troy Ludwick says:

    Awesome post. I’m a normal visitor of your site and appreciate you taking the time to maintain the excellent site. I’ll be a frequent visitor for a long time.

  13. 植牙 says:

    植牙植牙的維護和真牙相 似,只要維持良好的口腔衛生習慣,定期看牙醫,人工植牙是可長期使用的。而一般假牙必須磨損健康真牙,往往容易造成齒槽骨吸收、牙齦萎縮,因此,從長遠所 獲得的堅固性、便利性及健康利益等多方面來看,人工植牙反而是一種較經濟實惠的選擇。

  14. You’ve really impressed me with that answer!

  15. It’s good to get a fresh way of looking at it.

  16. There’s a secret about your post. ICTYBTIHTKY

  17. Metin says:

    Cainllg all cars, calling all cars, we’re ready to make a deal.

  18. Thanks for revealing your ideas here. The other factor is that every time a problem comes up with a laptop motherboard, folks should not go ahead and take risk associated with repairing the item themselves because if it is not done correctly it can lead to irreparable damage to the entire laptop. Most commonly it is safe just to approach a dealer of your laptop for any repair of motherboard. They have technicians who’ve an competence in dealing with laptop motherboard problems and can get the right prognosis and accomplish repairs.

  19. Good article. I feel I to begin composing articles
    all over again

  20. Have you any tips about setting up a web site? I’m just seriously tired of working
    on the same kind of thing in the office and would like something mroe challenging.

  21. Your blog post is fantastic. Could I connect with you on Facebook.

    my page … sell your automobile (wez-favourite-cars.tumblr.com)

  22. Brilliant writing. Exactly what are your own sources?
    Constantly find it slightly difficulot to begi the process

  23. Excellent blogpost. Motivates me to start out creating blogposts all over
    again

  24. This truly inspires me. I wish I could write aas amorously as you.

    Feeel free to visit my website: selling used car

  25. sell my car says:

    Stimulating blog post. Will you direwct me to more oof your posts??

    Also visit my blog post sell my car

  26. I really love scanning your blog. Do you have any sort of
    easy methods to set one up??

    Here is my web site :: auto sellers (best-selling-german-cars.tumblr.com)

  27. Stefan says:

    This honestly gets to me. I simply want to be able
    to write as passionately as you do.

    Here is my web blog – buy my car (Stefan)

  28. Do you have any sort of advice on creating a web site?
    I am really bored of doing the same kind of thing in the
    office and need a new challenge.

    my blog post; buy my car (bonkers-about-bmw.tumblr.com)

  29. Your site is actually fantastic. Could I connect with you on Google.

    Feel free to visit my blog … auto buyers; http://torisautos.wordpress.com,

  30. I personally read through a number of web blogs, however yours is a pleasure to read.

  31. Your design is a real gem. This makes a massive difference when spending time on a blog.
    You’ve certainly got me returning for more incredible..

  32. carlist.com says:

    Youre so cool! I dont suppose Ive read something like this before. So nice to search out any person with some authentic thoughts on this subject. realy thanks for starting this up. this web site is something that is needed on the web, somebody with a bit of originality. useful job for bringing one thing new to the internet!

  33. hey there, Mark out of Gwinnett saying howdy. I really truely like looking at your website, I am just usually left wanting more.

Leave a Reply