By on January 3, 2013

Remember when Volkswagen’s goal of 800,000 units in America seemed utterly implausible? TTAC does. But Volkswagen, which was in the dumps not too long ago, is now more than half-way to their goal, selling 438,000 units in the United States, a 35 percent jump over last year. But that kind of growth isn’t likely to carry over for 2013.

VW USA CEO Jonathan Browning is taking a “cautious” view regarding growth in 2013, despite his prediction of a 15 million unit market in 2013. The slow growth could come as a result of white-hot products, like the Passat, Jetta and Beetle, losing some of their luster as a result of being on sale for a longer period of time. Updated products like the new Golf and a rumored three-row crossover are still on the horizon.

Meanwhile, Audi’s target of 200,000 units by 2018, an integral part of Volkswagen Group’s 1 million unit goal, is even closer. Audi has sold just under 140,000 units in 2012, and the 60,000 unit gap should be easier to close given the continued growth in the luxury segment. A new A3 will be competing with the Mercedes-Benz CLA and a revamped BMW 1-Series, while the A4 and other crossover variants in Audi’s “Q” range should help add even more volume. Audi’s rising profile among American consumers seems unlikely to dissipate any time soon either.

Volkswagen as a whole still has to close a substianial gap to reach their ambitious targets, but rather than being a farcical pipe dream, their goals now look achievable – something nobody could have predicted in 2010. Then again, the peanut gallery panned the new-for-America Jetta and Passat, and who’s laughing now?

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56 Comments on “Slow Growth In 2013 Will Put The Brakes On Volkswagen’s Ambitious Stateside Growth...”


  • avatar
    mike978

    Great article – it was true that this target was derided by some in 2010. Did they ever predict it would be linear growth? I don`t think so, so even if 2013 is slow growth that helps them get to their target with 5 more years to go.
    The Jetta is doing well for a 3 year old vehicle, the Passat does seem to have leveled out at 10K a month but is still fairly fresh (although a lot of midsize sedans have been updated/new in the past year).
    I would expect their future growth will come from :

    a) total vehicle sales reaching 17-18 million by 2018, this is only 3% growth a year in 2014, 2015, 2016, 2017 and 2018 (year end). This would mean they need a market share of 4.5-5% which given they are already near 4% is not a great leap without new product.
    b) adding a sub compact (adds 50K a year going of Fit, Sonic, Fiesta sales)
    c) adding a real midsize CUV (Honda Pilot, Ford Explorer type vehicle for at least 50K a year sales)
    d) replacing the Tiguan with a designed for America compact CUV (like CRV, Escape, which could easily get 100K a year). The Tiguan is a vestige of their European strategy (old Passat and Jetta).

    Audi can get to their target but they have no major segments to fill unlike VW (subcompact sedan, compact CUV etc).

    • 0 avatar
      th009

      e) more competitively-priced Golf. It looks like the new ones will be coming from Mexico, so there could be some more aggressive pricing on the cards.

      To elaborate on your Tiguan point, I think there are three factors holding it back from further success: (1) too small, especially in terms of trunk space, (2) more expensive than the competitors, and (3) no TDI option.

      • 0 avatar
        MarkP

        I think you’re right about the tdi option. When we bought our 2011 Jetta tdi last year we mentioned that we would probably have bought a Tiguan instead if it had come with a diesel. The salesman said he thought they could sell lots more Tiguans if they did.

    • 0 avatar
      corntrollio

      I know the CUVs are in the pipeline — I believe there were three planned, the Tiguan and Tiguan LWB (as 2015 models?) and the Tiguan CC (as a 2016?). All are based on MQB. And the TDI is almost certain.

      I’m assuming the still-not-here new Touareg on MLB will be priced similarly to now and won’t be a big player.

      For the subcompact, I believe VW has said they won’t bring the Polo here. NSF-based cars are too small for here, of course.

      As much as it’d be cool to see the Scirocco on these shores, it seems like VW has chosen the GTI as the preferred model here and has determined it’s not worth the money to bring it here. It also wouldn’t raise sales significantly, since it’s a niche vehicle.

  • avatar
    Ubermensch

    Once the poor reliability data starts to roll in on the new models, sales will crater. This has been the SOP for VW in America and I see no reason why this will change.

    • 0 avatar
      stryker1

      Do you have reliability stats that no one else has?

    • 0 avatar
      Ubermensch

      Issues are already popping up for the new Passat and Jetta. 2011 Jetta’s are already rated much worse than average on CR. Really, I don’t need them to know how this is going to go as it has become a broken record for VW.

      • 0 avatar
        sirwired

        “Issues” are cropping up? What does that even mean?

        I checked CR’s website. Except for a minor blip on the fuel system, the only noted trouble spots are squeaks/rattles/body hardware/radio problems. While that might put a big black circle on the “predicted reliability” circle it’s hardly a catastrophe.

      • 0 avatar
        corntrollio

        What issues have the new Passat and Jetta had specifically?

      • 0 avatar
        Ubermensch

        Jetta (5-cyl) has has issues with fuel system, rattles, body hardware, audio system, and climate system. The 4-cyl is fairing even worse with issues in several other categories. Not good for a car that is only 1 year old. There are already looking like similar issues are popping up the 2012 Passat.

        It doesn’t look like anything has changed as far as VW quality.

      • 0 avatar
        1998redwagon

        actually i have the latest cr mag on used cars. both the jetta and passat are rated as recommended. along with the golf, jetta sport wagon and the cc. note these are different from last year when the jetta and passat did not have that rating, nor the cc.

      • 0 avatar
        redmondjp

        Ubermensch – I couldn’t have said it any better myself.

        This upward growth trend will be self-correcting if VW’s long history in this country is any indication. My mechanic friend told me ten years ago that VWs were great for about the first 80K miles, and you’d better sell after that since all of the plasticky parts start breaking. After owning a couple of them, I have experienced exactly that, not to mention the maddening intermittent electrical problems.

        And as someone who has changed the same VW window regulator assmbly on the same car more than once, I will just say that the jury is still out on the long-term reliability of the current crop.

      • 0 avatar
        klossfam

        I would not put much faith in CR – I’ve done their inane surveys for years in hope they would someday be more reflective of reality.

        TTACs own Michael Karesh’s True Delta is a more realistic view. I will confirm – as a household that has owned 4 VWs & Audi as well as 5 Hondas & Acuras in the last decade, that the Honda products, overall, have been slightly more reliable – BUT only slightly. The worst of the bunch was a 2002 Acura TL-S – bad throttle body and new tranny all inside 35k miles.

        The real world difference as been very minor and the VWs have never left me stranded and have never had the type of major failures like the Hondas (we had a 2004 Pilot that drivers seat smoldered through the leather seat and almost caught fire when the seat heater shorted out – while driving at 50 mph).

        To me, the level of luxury, performance and fit & finish in the VWs still make any slight difference in minor issues well worth owning them. Just the occasional drive in my son’s 2011 GTI Autobahn is something I look forward to. VW has several vehicles that transcend the price class and are simply in a class by themselves. The GTI and Golf TDI among them. There is a reason for their growth in North America…

    • 0 avatar
      andyinatl

      Nah, that’s at least 10 year old preconceptions. As someone who had a rattlebox 2001 Civic (had to shove the old gum boxes between dashboard and passenger door to sorta quiet it), a rattlebox 90s Accord, the rattles are specialty of Japanese cars (with Toyota, being possible exception). The rest of the stuff you list is a bunch of hogwash that has no basis in reality. There were fuel system issues in first batch of new diesels, and that’s it. There were NO OTHER issues that were documented anywhere. There may be one/two off thing, just like with ANY brand, but the widespread issues are thing of the 90s. And yes, i used to own 2000 VW Passat, on which i had to replace window regulator. That was about the only unplanned thing that died, and it was worth it for the amazing driving enjoyment I received from the car on daily basis.

      • 0 avatar
        corntrollio

        Exactly, andyinatl, after hearing the supposed details of what was going wrong, it was hard to take the allegations seriously, an opinion bolstered by the actual CR results.

        And let’s also note that CR heavily weights past history into its ratings of relatively new cars, which is why even new generation Toyotas get great ratings typically.

      • 0 avatar
        jpolicke

        The turbo in my ’09 TDI failed at 66k, repair cost $3000. When the dealer told me the cat/DPF failed last month and would have been $6000 I traded it in. The cost of the turbo combined with the unusual maintenance requirements made any theoretical diesel savings go up in smoke. Apparently nothing breaks on these cars that doesn’t cost 4 figures to fix. It was an enjoyable car to drive, would be a great car to lease – but a guaranteed money pit over the long haul.

        I now have a Challenger SXT, partly paid for with Chrysler’s $1000 VW conquest rebate.

      • 0 avatar
        Ubermensch

        FYI – I based my opinion on the CR reliability ratings. CR only recommends the TDI version of the Jetta, the gasoline versions are now too unreliable and low scoring to recommend. I see nothing in the current VW reliablity data that points to any significant improvement. In fact the GTI model that I was strongly considering has now dropped off their recommended list because of reliability issues. Typically it takes 2-5 years for issues to start popping up with many VW models but the new Jettas seem to be having problems right out of the gate…not good.

      • 0 avatar
        corntrollio

        jpolicke, based on my knowledge of what it costs to get those done at somewhere other than the dealership and the cost of parts available online, it sounds like you got taken for a ride by the dealer. Turbos for VWs can be had for $400-500, and a DPF can be $1000 as a reman (should last at least 120K usually).

        With a turbo and DPF being replaced that early, sounds like a maintenance issue too, without knowing more. The DPF is pretty simple, and if you don’t follow the simple regen instructions, sure it’ll have to be replaced. The turbo could have failed on its own too, of course, sometimes it happens, but both of those failing early is suspicious.

    • 0 avatar

      I’d be curious to know the stats between the German produced cars and the MexiTenn cars. The Golf, TDi, GTi and R all look like the originals. The Jetta and Passat look like copies. The quality of the individual parts, like window mouldings, are noticeably higher in the German builds. Indeed, they are clearly designed to take on way tougher competition than the CamCord.

      I can’t imagine any other market where you could de-content suspension from IRS to beam axle and get away with it, but they have….and sales are up.

      • 0 avatar
        jpolicke

        corntrollio, your knowledge is apparently based on older VW diesels, definitely not common rail TDIs (engine code CBEA). The turbo housing is cast with the manifold, and even the electronic wastegate cannot be replaced separately. VW part cost is $1800; ID-Parts can get one for $1400. Your numbers are way off. There are no aftermarket DPFs for this car, and the DPF wasn’t the part that failed but the cat that is co-packaged with it.

        As for maintenance, the car was strictly maintained by the book, with the proper VW.507 spec oil. As for the DPF the system regens when it wants to, there is no procedure or “instructions” to follow.

        I won’t miss the $130 DSG fluid changes either. Hope the next owner does the timing belt; that was an expense I managed to avoid.

    • 0 avatar
      danio3834

      jpolicke, that is the downfall of modern diesels. Without the complex and expensive emissions equipment, they can be fairly reliable and return the benefits diesels once provided.

      Unfortunately the consumer is saddled with the added cost of the equipment for which they get no value.

      • 0 avatar
        Ubermensch

        “Unfortunately the consumer is saddled with the added cost of the equipment for which they get no value.”

        I happen to value clean, non-carcinogenic, smog-free air. I also value consumers not socializing the costs of their purchases by making the rest of us pay for dealing with their emissions. The cost they are “saddled with” is only a small portion of the real costs that come with driving said vehicle.

      • 0 avatar
        28-Cars-Later

        Automobile emissions are a political football, plain and simple. Because of this an entire industry has grown to test and fix issues with these systems, but I suspect the real goal is to over time simply remove otherwise functional automobiles from the road as planned obsolesce.

        “I happen to value clean, non-carcinogenic, smog-free air.”

        I would be far more concerned about the growing number of coal fired power plants here in North America and in the Far East polluting the world’s air. If somehow their emissions are “safe” or acceptable, but car emissions aren’t “good enough” its simple evidence of the politics behind auto emissions and hypocrisy in the highest order.

      • 0 avatar
        Dan

        Real costs? If you do something stupid like choose to live in the LA smog basin, sure. In the rest of the country that’s bull. Auto emissions here weren’t any kind of issue under the standards of 20 years ago let alone today.

        Your one size fits all approach means forcing me to spend thousands of dollars for no gain except the self satisfaction of urban greenbeans who I don’t know, don’t like, and are thankfully too far away for us to smell each other in any case.

        Talk about socializing costs on others.

  • avatar
    Charlie84

    Meanwhile, my local VW dealer has had at least 8 new Golf Rs on their lot. VW’s need to continue moving units, and lot space necessary to do so, will probably kill North American prospects for the Mk7 Golf R.

    • 0 avatar
      stryker1

      The golf R is a ridiculous vehicle that was DOA. It shouldn’t be a surprise to anyone that they can’t sell up-jumped golfs for BMW money.

      • 0 avatar
        Ubermensch

        The price and the manual-transmission-only ensures the Golf R will remain a tiny niche vehicle for only the most diehard VW fanboy.

      • 0 avatar
        Charlie84

        Of course. It was never going to be a hot seller. Everyone knows this. VW knew it before they even brought it here. The previous R32s were limited to 5K units for this reason. There was not an official limit for the Golf R, but VW planned on selling about 5K units over 2 model years. My point is less about the Golf R and more about the fact that as VW becomes increasingly volume-focused, niche models for VW enthusiasts will become an impossibility. Even if they can break even selling around 5K units, they can’t afford to have them sitting on valuable lot space if several Jettas or Passats could occupy that same square footage over less time.

      • 0 avatar
        th009

        “The golf R is a ridiculous vehicle that was DOA. It shouldn’t be a surprise to anyone that they can’t sell up-jumped golfs for BMW money.”

        My local VW dealer sold about 15, with one currently left on the lot. A niche model, for sure, but far from DOA.

      • 0 avatar
        Speed Spaniel

        “The price and the manual-transmission-only ensures the Golf R will remain a tiny niche vehicle for only the most diehard VW fanboy.”

        I just acquired a 2013 Golf R a month ago and I am far from a diehard VW fanboy. I don’t think my 2012 Miata would like that. I think of myself as a connoisseur of quality machinery. Having owned many fine machines in the past 20 years the R is right up there with the best of them. Very reminiscent and the same attitude as my 2007 S4 but at approximately half the price. Agree at almost $37,000 it’s pricey for a ‘mere’ Golf, but any bozo with half a brain can negotiate these WELL below the asking price. Solid construction, fantastic packaging, all wheel drive, excellent workmanship and materials, comfort, refinement, top safety scores, fantastic visibility, pep, solid handling and the fact they aren’t all over the road. I can’t think of a better German bargain.

      • 0 avatar
        lon888

        To some extent the R was DOA. As a GTI driver and a member of various GTI fanboy, excuse me enthusiast’s sites, all of the fanboys were completely convinced the US allotment of 5000 R’s would be sold before they even hit the shores. There are still many dealers with these things still on their lots. At $37K not exactly a big seller or a bargain.

  • avatar
    genuineleather

    The problem with VW’s 800k goal is that they only have two volume prducts. Everything else (Eos, CC, Routan, Touareg, Tiguan) is niche, with no hope of serious numbers in their current configurations and prices.

    That’s not to say that those models couldn’t get a Jetta-esque bigger/better/cheaper redesign, of course. But they’d need to be hits, which isn’t a given considering how competitive the market is. They would likely need a hot-selling compact SUV and a hit midsize one, neither of which VW has accomplished in the NA market.

    • 0 avatar
      sirwired

      In VW’s defense, they do have a Tiguan replacement on the way. That product is clearly inadequate for the US market, and they know it. (It’s not real competitive in the European market at the moment either…)

      It remains to be seen if they’ll have a competitive full-size SUV any time soon. If they can build it on top of their current Modular Platform, maybe… (that’s what the new Passat is built on). If not, nope.

  • avatar
    philadlj

    Chevy’s Equinox CUV outsold the Malibu sedan by >8000 units in 2012. Add 97,786 Terrains, 85,606 Traverses, 78,280 Acadias, 57,485 SRXs, 56,703 Enclaves, 36,935 Captiva Sports, and, conservatively, about a MILLION more GM body-on-frame trucks, vans, and SUVs, and you start to see VW’s problem. They simply don’t offer enough products Americans want.

    The Tiguan and Touareg are niche vehicles and always will be. VW has figured it out in Japan, and they’re starting to figure it out in the US: you have to make cars the culture wants to buy. Our culture is lots of space and lots of value. They’ve succeeded in the sedan market, but remain at a decisive disadvantage in not offering truck/trucklet choices that fulfill those criteria.

    • 0 avatar
      mike978

      Agreed, but they have shown they can design and make American-ized vehicles with the Jetta and Passat. The other big volume segment is the compact CUV one which a newly Americanized Tiguan (change the name hopefully) could compete in much better than currently. The Toureag is too expensive for its size, but having a $30K Pilot/Explorer competitor would also add appreciably volume in a growing market.

    • 0 avatar
      wsn

      I won’t say “they’ve succeeded in the sedan market”, as the entire brand is out sold by Toyota Camry alone.

      • 0 avatar
        danio3834

        I guess that depends on your measure of “success”. Profitability? Pure market dominance? If I were a VAG shareholder, I’d take steady profitable growth.

      • 0 avatar
        EquipmentJunkie

        I agree with Danio. VW has produced two sedans that sell over 100K units per year. I’d say that is success in this market…especially when you figure VW’s small dealer network and the brand’s recent mediocre sales history. VW recently seems to have begun to understand our market. A successful Tiguan replacement (beginning with the name and a diesel option), a Polo that includes a diesel option, and a the small truck with a diesel would all help overall sales volume. VW needs to “hit it where they ain’t” by exploiting their assets of a successful, federalized diesel.

      • 0 avatar
        mike978

        wsn – I didn`t say they have succeeded in the sedan market, but compared to their previous generation sales botht he Jetta and Passat are doing much better. Which is what was intended.
        Also for 2012 VW outsold the Camry (438K vs 405K source goodcarbadcar). Close. Not that it is a major achievement, but you did bring up your “fact”.

  • avatar
    Beerboy12

    There are challenges with rapid growth. After sales service can become stressed when there are more VW’s on the road than it can cope with and that will affect product perception and future growth. VW already has to manage poor reliability perceptions. Selling to many cars and not having staff and parts to deal with warranty claims will be a big problem.
    And when they put a manual TDI 4X4 Tiguan with mid level spec on the market I will be the first in line.

    • 0 avatar
      EquipmentJunkie

      “And when they put a manual TDI 4X4 Tiguan with mid level spec on the market I will be the first in line.”
      I agree with you. Those specs you mention appeal to me, too. My parents decided to go the route of an ’05 Mercedes ML CDI instead. Their first choice was a Tiguan…but no TDI equals no sale.
      I would need to remove the “Tiguan” name from the rear hatch. Yes, I hate the name that much.

  • avatar
    gasser

    Replace the 2.5 engine ASAP. This is the most widely criticized part of the Passat and not much of an upgrade in the Jettas. Put one’s money into what you’re doing right, not taking blind shots ith a new Tiguan or such.

    • 0 avatar
      mypoint02

      No doubt the 2.5 needs to go and I’ve seen rumors that it will. But what would they replace it with? The 2.0T would cost quite a bit more. Personally, I’d like to see a new diesel option. The current TDI is getting pretty long in the tooth.

      • 0 avatar
        Redbarchetta

        There is an all new 1.8 Turbo replacing the 2.5. We should hopefully see if for 2014 in the Jetta and Passat.

        And before anyone says anything it’s not related to the old 1.8T sludge monster. It’s based on the current 2.0T. I can’t wait for it, it’s should help us with sales as the Jetta and Passat age.

  • avatar
    oldyak

    Just one question……
    Did they solve the ‘every light bulb on the car burning out b-4 its time’ problem????

    • 0 avatar
      thesparrow

      Not judging by the 2011 Jetta that I saw driving down the freeway at night with absolutely no working tail lights. Even the brake lights didn’t work when traffic slowed. I’m guessing this was an electrical issue rather than just bulbs, but that incident alone was enough to scare me from considering one of the newer, cheaper-made-south-of-the-border VWs.

  • avatar
    360joules

    Co-worker currently has dealer chasing all sorts of peculiar electrical gremlins in 2011 Jetta: never-wrecked-always-dealer-serviced. Too late to lemon law. Sad for VW because she otherwise loves the car.

  • avatar
    Whatnext

    Oh yawn, the usual chicken little comments about VW quality. I’ve got a 2 year old Jetta TDI that’s had no problems other than a faulty fuel guage sending unit. Which is the same problem I had on my generic GM compact 10 years ago. And a far cry better than my 5 year old 3 series that has always eaten 1 litre of oil a month and has alloy wheels apparently made of silly putty, judging by how often they get bent!

    • 0 avatar
      Ubermensch

      I’m glad that your 2 year old car has the same problem as a crappy 10 year old GM car. Using a BMW and a 10 year old GM as measure of reliability is not helping your case.

      • 0 avatar
        TOTitan

        I wonder if the VW hate thats being displayed here is based on verifiable reality or perhaps third or fourth hand information. Maybe Im lucky, but I have no problem with VW. I bought my daughter a new Rabbit in 08 with the much maligned 2.5 and have had zero problems in 70,000 miles…zero. I bought a Sportwagon TDI for myself in May and have gone 13,000 miles with no issue. The way both of them drive and handle is vastly superior to anything in class, and the TDI is a torque monster. It makes me smile every time I drive it.

    • 0 avatar
      redmondjp

      Get back to us in another couple of years, and pray that you don’t ever get a bad batch of fuel in the meantime. I’ve still got a dead Passat TDI in my driveway, waiting for me to fix it (in the mean time, I have bought two used Hondas). I do love the 45mpg WHEN it is operating . . .

      • 0 avatar
        corntrollio

        A bad batch of fuel took out your TDI? How so?

        The only “bad batch of fuel” I read about was that some guy put gasoline in his VW TDI. That definitely killed the DPF, as someone complained about earlier.

      • 0 avatar
        redmondjp

        Well, it was the low-sulphur fuel that knocked out the seals on my IP a few years ago, and it hit other TDI owners that I know within the same few months as my car so I know it wasn’t a fluke.

        As for bad fuel, all it takes is some water or gas (mistakenly put into the underground diesel tank, which actually happens more than one might think) and you can kiss the IP goodbye – yes, theoretically there is the fuel-water separator, but that doesn’t always work (read the Ford 6.0 diesel forums for horror stories on this – and Ford won’t warranty anything related to bad fuel either).

        I’m a big diesel fan, having owned three diesel vehicles in the past ten years (1981 Rabbit, 1981 Datsun 720 SD22, and a 1996 TDI), but any diesel made in the past 10 years I wouldn’t personally own because I no longer see a clear advantage over gas with all of the additional emissions equipment, and the maintenance costs on the diesels are far higher when something does go south.

        Diesel engines use to be simpler, more reliable, longer-lasting, and lower-maintenance than their gasoline counterparts. Those days are over.

        YMMV

  • avatar
    HotPotato

    I have owned watercooled VWs my whole life, and spared no expense on maintenance and repair by top-quality shops. Let me put this gently: I think if these new owners are leasing them and handing them back before the warranty is up, they’ll be happy.

    Granted, today’s VWs are simpler and cheaper than the marvelous, fiendishly unreliable rebadged Audis of the early 2000s — those were the automotive equivalent of an abusive relationship (but I love Greta so much! and paying for her latest breakdown just shows how much I care!). But reliability expectations are also higher at the low end of the market: today’s Jetta customers are Corolla customers.

    I wish VW well. But after 20 years of their serial wallet assault, I’m done with them.

    …at least until I’m bored of my current reliable non-VW.


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