By on July 12, 2013

CrossBlue-Concept-01-Picture-courtesy-Bertel-Schmitt-450x300

Volkswagen is having a bit of a tough year in America. As of June 1st, inventory for the brand stood at 105 days supply (third highest in the industry, behind Cadillac and Lincoln). 500 workers have been laid off  from the Chattanooga assembly line due to slow sales of the Passat, while VW is offering 0 percent APR across the board. What VW lacks, according to dealers, is a mid-size crossover, something bigger than the Tiguan but less expensive than the Touraeg.

Automotive News reports that VW CEO Martin Winterkorn spoke to dealers at a meeting in the Washington, D.C. area, essentially promising them such a vehicle. Appearing with Winterkorn were the CrossBlue concept and the CrossBlue Coupe concept, two vehicles that are said to preview such a crossover.

As it stands, the big debate is over whether to build such a vehicle in Chattanooga, or in Mexico. Building it in Chattanooga would likely mean that those laid off workers would see the return of their jobs. But IG Metall, one of Germany’s biggest labor unions, and a big player on VW’s supervisory board, won’t approve plans for the new vehicle to be built in Tennessee unless workers are allowed to organize there.

There’s a lot at stake here. VW wants a product like this to be built at a factory of its choosing. IG Metall fears that a non-union shop will undermine other unionized VW factories in Europe. The UAW badly needs to organize a foreign plant in the South. Tennessee wants to uphold its reputation as a “right to work” state this is friendlier to business rather than organized labor. All this over a vehicle that many people reading this will immediately dismiss as just another boring crossover. Gotta love the auto industry.

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49 Comments on “Amid Slowing Sales, Winterkorn Promises Crossover For VW Dealers...”


  • avatar
    1998redwagon

    life gets complicated. decisions that appear simple are not necessarily simple. having said that i can appreciate the complications but i do not appreciate the crossover.

  • avatar
    Omnifan

    VW doesn’t need another cockroach-looking crossover. They need a clever vehicle that people don’t know they need. I know, easier said than done.

  • avatar
    sirwired

    What I want to know is: what has the holdup been? This has been a gaping hole in their product line for YEARS. I wouldn’t personally buy one, but CUV’s are popular enough that not offering one at all is a big problem.

  • avatar
    vww12

    A VAG SUV somewhere between a Tiguan and a Touareg?

    Guys, this VAG product already exists.

    It’s called an Audi Q5.

    • 0 avatar
      hachee

      No, it’s bigger than a Tiguan but less EXPENSIVE than a Touareg. Basically, a Honda Pilot competitor – a 3 row CUV priced from $30K to $45K or so. While many readers here may not see the appeal, like it or not, the market is huge, and it’s taken them way too long to build one.

      • 0 avatar
        bball40dtw

        Who is going to buy it though? What will this new product do that an Explorer, Traverse, Highlander, Pilot, Pathfinder, or Durango won’t do better. There is no reason why I would pick a VW in this segment.

        They haven’t had a product in the segment because they don’t have a clue how to make a successful product for it.

        • 0 avatar
          CoreyDL

          LOL Traverse.

          • 0 avatar
            bball40dtw

            The Traverse is bad, but it’s cheap. A North American Passat based crossover may be worse though.

        • 0 avatar
          Dubbed

          Because you wouldn’t buy this means nothing to other buyers.

          And defining a cars existence as what it does better or even if its better than a competitor is rather meaningless in this business. Its a business of egos nothing close to what your expecting.

          It would be Volkswagon take on this segment, that’s all that has to be said.

          Besides the more competitors the better.

          • 0 avatar
            bball40dtw

            I would like to see what they have planned. If they are bent on winning in America, this is a hole. The Explorer alone sells about a third of the volume of VWs entire lineup in the US.

            I’m well aware that they need the product because they have set goals and do not want to continue to be a niche player in the US. Brands set targets to be competitive, among the leaders, or the leader accross different product lines. I understand that the MKZ was not built to be world class 3 series competitor.

            My issue is they have never been able to be competitive in the SUV/CUV market in the US. Audi has been recently, but they were late to the party. Until they actually roll out a 7-passenger CUV that is competitive in areas people that buy these vehicles care about, I will remain skeptical.

    • 0 avatar
      Speed3

      The problem with the Touareg isn’t that its too big (the Explorer, Highlander, and Traverse are all about the same size), its that its too expensive.

      Considering that VW group also has the Audi Q7, Porsche Cayenne, and soon to be Bentley Sheik-UV (and hell, wouldn’t surprise me if there is a future Bugatti version as well), the VW brand does not need a luxury version.

      Discontinue the current Touareg, replace it with a Passat-based, 3 row crossover and I guarantee they get better sales. I mean hell, the Touareg is only selling in the houndreds per month anyway.

      • 0 avatar
        Kyree S. Williams

        If Volkswagen really cares to get things right and listen to the needs of the American market, a 7-seat, Touareg-based Passat would probably do wonders. They also need to keep the price in check–a big problem with VW Group in general–and not insult customers with unnecessary decontenting. The GM Lambdas are probably the most accommodating vehicles in the class, but they are much closer to minivans with conventional doors than actual crossovers. So I think the three crossovers that Volkswagen should aim directly for are the Explorer, Pathfinder and Santa Fe, which (between the three of them) seem to embody the best of the segment.

  • avatar
    tomLU86

    The higher one goes, the more delusion one finds. Like GM a generation ago, VW has opted to ‘capitalize’ on it’s ‘brand equity’ that was built in the past. VW is giving Americans ‘more for less’ by decontenting cars and making them bigger and more American.

    I call it ‘ersatz German engineering’. VW is not going to “out-Toyota” Toyota or ‘out-crossover’ the Americans and Japanese. They should have learned this 30 years ago when they “Malibuized” the Rabbit. The Passat looks like what a proper Ford Taurus might have been–and is as exciting to drive.

    The diesel and Golf/GTI are VWs only bright spots. Unfortunately for them (and many of us car lovers) Americans don’t like hatchbacks unless they are big–aka SUV.

    As for Tennessee, which gave VW hunderds of millions in breaks, perhaps they should have studied how VW treated Pennsylvania–when breaks ended, plant closed and production moved to Mexioo. Again, hope and delusion trump cold, hard facts.

  • avatar
    APaGttH

    Is the answer a mid-sized CUV? Mazda dropped the CX-7 in favor of the smaller CX-5. Buick has the pint sized Encore which is selling better then what 98% of the B&B expected. Other makers are now moving to build pint sized CUVs like the Encore.

    Although the product mix at VW is less than perfect, quality is definitely up from the horrors it was a decade ago, the new Beetle is more, err, masculine, the Jetta for all the grousing is selling better than the previous generation. Their CUV/SUV lineup leaves a bit to be desired, the rebadged Chrysler minivan worked out better for Chrysler (which seems to have adopted the VW suspension tuning) than it did for VW (and the really creepy Brooke Shield ad campaign sure as Hell didn’t help).

    If I was looking today in the under $30K category, the Jetta wagon would be very high on my list.

  • avatar
    DC Bruce

    Not long ago I happened to ride in a friend’s Tiguan. I was shocked at how little space there was in the car — especially for cargo behind the second seat — given the car’s exterior dimensions.

    If VW builds a larger 2-row, or marginal 3-row crossover (like the Jeep GC, the Pilot or the Highlander), it will be very late to that party. So, I agree with the others that it will have to offer something really special to persuade owners and intenders of those vehicles to switch to VW. A further problem is VW’s questionable reputation for reliability. As the owner of an ’08 Pilot with nearly 90K miles, I can safely say that, notwithstanding its faults, it’s a pretty bulletproof vehicle and I know plenty of Highlander owners who say the same. In this market, reliability counts for a lot.

    So far, with the exception of the TDI and the GTI, VW’s strategy seems not to be to offer “something different” but to trade on brand equity (“German engineering”!) and offer “something cheaper.”

    As for IG Metall. It seems that unions’ propensity for killing their employers is an international phenomenon. The problem that VW has in North America is similar to the problem that Volvo has, and that Saab had: they simply lack the brand cachet of a Mercedes-Benz, BMW, or even Audi, to command a price premium over the Japanese, Korean or domestic nameplate product and, not doubt, thanks to the folks at IG Metall, they cannot compete with those Asian and US manufacturers on price.

  • avatar
    ash78

    Hmmm…so Europe gets a new Passat Alltrac (or Allroad?) while the market that is absolutely obsessed with quasi-offroad cars and crossovers has nothing of the sort.

    I’ve long said that VW, for all their initial quality and engineering prowess, Condesendingly ignore the realities of the US market. This was more clear under Piech, but it’s obviously still going on.

    FWIW, my folks just bought their 24th VW product, the first one withouth a VW badge. Audi Q5 — bigger than a Tiguan, but less expensive than a Touareg :D

    • 0 avatar
      hreardon

      I had a fully loaded 2.0T 2012 Q5 as an extended loaner vehicle about a year ago. Aesthetically I find the Q5 to be the most boring model in Audi’s present lineup, but as a package it’s quite good. My wife was literally over the moon about it when she came home and saw it in the driveway. To this day she reminds me that the Q5 is the car she wants to graduate to and to be honest, I find few reasons to argue other than the fact that the B8 platform is getting a bit long in the tooth, yet the Q5 isn’t due for replacement for a good 2 years yet.

  • avatar
    wmba

    But, but what kit would it be built on? MQB or MLB? Or, horror of horrors, a specialized one-off platform based on the US Passat?

    Darn that footpedal to front axle dimension set in concrete! No sympathy for this outfit at all.

    • 0 avatar
      hreardon

      Without a doubt, MQB. MLB is for longitudinal engines and is far too expensive for this market segment.

      The Chattanooga factory is already “MQB ready”, so expect the Passat to migrate there in the not-too-distant future and any future product based on MQB to technically be capable of fabrication/assembly there.

  • avatar
    30-mile fetch

    I’m sure a midsize CUV would generate sales, but if the Passat is selling below expectations VW either needs to lower the scope of their North American conquest or figure out why Americans aren’t buying their intended bread-and-butter sedan in the numbers they had hoped.

    • 0 avatar
      hreardon

      Why the new Passat isn’t selling in the numbers they’d like is very simple: While Volkswagen finally got the formula right, what they didn’t get right is the extreme competitiveness of this segment. Case in point, the new Accord or Mazda 6 would be on my shopping list WELL before the current US-spec Passat. Christ, you’re stuck with halogens and VW’s antique RNS-315 or 510 Nav systems, plus incredibly bland styling.

      This is a competitive segment and after selling through to the early adopters they’re finding it much harder and costlier to draw in new buyers from other brands. The mid-cycle refresh is going to have to be a pretty significant one if VW wants to keep up the momentum.

      • 0 avatar
        Slave2anMG

        I’m a VW homer and was driving a (employer-leased) Jetta TDI wagon…ancient platform but it was really a very nice driving car and stone cold reliable over 68K miles. Time came to turn it it and get another car…had decided the Jetta wagon was just a bit too small. The Tiguan was never in the running as it was just puny inside. Touraeg was out account of price. Though I wanted a wagon, I was out of luck with VW. The TDI Tennessee Passat just didn’t impress me driving it. I ended up with a CC on the also ancient German Passat chassis; the new Passat wishes it drove that well. The Tennessee Passat was, well, just plain dull…trying to out-Camry the Camry with dullness. Sad.

  • avatar
    hreardon

    Volkswagen sorely misjudged (shock!) the US crossover market. The Tiguan is a very poor fit because it is severely overpriced for what it offers as compared to product like the CRV or RAV4.

    My wife and I looked at the Tig for her and ended up with the CRV. It was a complete no brainer. While the 4WD CRV we got for her lacks some of the soft touch and the 2.0T of the Tiguan, it is substantially larger, plenty ‘zippy’ for her, quiet, has a sunroof, bluetooth, a nifty fold-flat rear seating system, and for lack of a better cliche: is a Honda. We’re both pretty confident in its ‘run it until it dies in 150,000 miles’ reliability. A comparable Tiguan was a good $3,000 more.

    VW needs a Passat-ified Tiguan that drops several thousand dollars and to introduce a medium product to fill in the $27,000-$35,000 market, then let the Touareg pick up the high end.

    Audi is going to be introducing the Q3, very popular overseas, within the next year, which will probably start at around $30,000 – $40,000, the Q5 covers the $37,000 – $50,000 market and the Q7 picks up at around $47,000 – $67,000.

    • 0 avatar
      See 7 up

      Your modern cars die at 150k? Please send them to me when that happens.

    • 0 avatar

      I will eat my own shorts if a K24/automatic CR-V has ANY significant mechanical problems before or around 150k miles.

      The reason they sell so many is they’ve carefully engineered out anything that could cause a serious problem in that kind of mileage. The result is boring and pokey but holy crap, nothing ever breaks. Can’t say that about a 2.0T VW.

      seriously, those motors require almost no maintenance at all. Occasionally the rear diffs on AWD motors pack up but as a quick-lube tech at a low end shop I can’t count how many 200k+ mile CR-V’s I work on that run like new.

      You’ll get sick of it before it breaks.

      • 0 avatar
        hreardon

        Bingo, Mrb00st – that’s my point: by the time we hit 150,000 miles it will likely be about ten years old and we will have either grown tired of it or outgrown it for one reason or another. Mechanical issues would most definitely NOT be the cause for replacement.

        Fact is – few people buy CUVs for a “German driving experience”, and as I think VW has learned from the new decontented Jettas and Passats, people in North America are buying *value* in this segment – they’re not looking for bells, whistles or autobahn tuning.

        Now, move up into the $30,000+ market and you’re talking different requirements of course. The problem is that Volkswagen is trying to cram a package into a market segment they are not priced or engineered for. Once they fix that and come up with something competitive they’ll do much better. I doubt they will reach CRV or RAV4 levels of sales, but far better than currently.

    • 0 avatar
      joeb-z

      Amen on the Tiguan pricing. Sales are anemic because these CUVs miss the mark by thousands.

      • 0 avatar
        hreardon

        To add to that, joeb-z, Honda has some really nice lease deals on the CRV. My wife picked her CRV-EX AWD a year ago this month with basically fees and first month out of pocket, 12k/year and $349/month. That’s exactly what she was expecting and she was very happy with what she got.

        Now what’s funny is that a friend at a Volvo dealership just offered us a deal on an XC60 T5 AWD for $369/month, 12k/year and $750 out of pocket. That’s a pretty attractive deal, too.

  • avatar
    See 7 up

    I just want the Eurovan with Westfalia option to come back to the States. Come on VW, you can do it!

  • avatar
    CoreyDL

    How’s about they drop the Tiguan (which is bleh) and build a couple things that look like the photo above.

    I like the color, the wheels, the lines are good and not awkward. There’s no DLO fail, and that indented thick chrome strip at the bottom looks very nice. The windows don’t even look too small.

  • avatar
    stevelovescars

    Am I the only one who thinks a wagon on the new larger Passat body would be a hit? Where I live Jetta Wagons and older Passat wagons are quite common and in much demand as used cars. Passat sales are down vs a few year ago when they offered AWD and wagon body styles… But rather than expand the current car’s options they want to go after the most asinine and overcrowded segment in the market of midsized CUVs?

    Seems to me that a good marketer would want to offer something competitors don’t rather than entering a market where sales battles will come down to price and cup holder count.

    • 0 avatar
      Vulpine

      Wagons are dead here in the US. With very limited exceptions (i.e. Subaru Outback) every wagon currently available is really a crossover or SUV–themselves essentially jacked-up station wagons. The low-riding sedan-based wagon simply doesn’t exist any more.

      • 0 avatar
        See 7 up

        They aren’t dead. They were purposefully killed and CAFE may have put the nail in the coffin.
        The majority of wagons are low spec, low powertrain offerings, with poor wheel/tire packages and minimal options combined with ZERO marketing. That last bit is the key – CUVs have all the marketing, wagons receive none. You would be amazed what marketing will do to a consumer’s desires.

        All these things and people say wagons don’t “sell” – catch 22, cause nobody is “selling” them.

  • avatar
    Jimal

    The answer to this question of course is the Amarok.

    If Volkswagen wants to grow the U.S. market it needs to get into new segments, not further dilute the segments it is already in. The all-but-abandoned small pickup truck market is one of those segments.

    Unlike every other player in the pickup truck market, Volkswagen doesn’t have the baggage of competing against itself. Ford, GM and Ram have all abandoned the small/midsize pickup market because they’d rather sell you a full-size truck. Toyota and Nissan would drop their small trucks in a second if they could make big enough inroads with their full-size offerings.

    That segment could be owned by Volkswagen.

    • 0 avatar
      See 7 up

      A 2.0 biTDI Amarok (the 180PS, 400 Nm) with 6 speed manual would fit nicely in my family. The combination of utility, interior refinement and efficiency would stop me even considering a Toyota or Nissan (both of which are about 5 yrs past prime in many respects). I do not want a full size truck. They are just too big for my taste.

  • avatar
    Vulpine

    What they lack is a pickup truck to compete with the “Big Three”, Toyota and Nissan.

  • avatar
    ehaase

    VW sales are down because its reliability is poor. I prefer the styling of the Passat, Jetta, and Golf over any of their competitors but the reliability and repair costs scare me.

  • avatar
    sunridge place

    Nice piece Derek. Coincidence that it appears on the day (or day after) Bertel was fired? Perhaps. Or, perhaps Bertel wouldn’t have allowed it? I suggested such a piece to Bertel in the comments section several times knowing damn well he didn’t have the balls to write it. The 500 layoffs was announced in April and not a peep about it over here under the old regime.

    Hyundai/KIA growth is stunted here by lack of capacity. That is not VW brand’s problem.

    My take:

    1. VW should be able to figure out how to get family of crossovers to work in the US/China/Europe.

    2. VW has to have success in crossovers to meet their US sales targets. They are also aggressively trying to expand their dealership footprint into smaller markets as another way to achieve that growth.

    Amarillo Texas anyone?

    http://amarillo.com/news/local-news/2013-06-12/volkswagen-returns-mazda-trades-hands

    I see Audi continuing their success but VW group having trouble hitting their target of 800,000 units in the US. The leap from 600,000 to 800,000 will be much tougher than the leap from 400,000 to 600,000.

  • avatar
    Hummer

    What reason is there to buy a VW over a Kia, which offers more for a more reasonable price.
    VW is overpriced and severally low quality, with severe reliability issues.
    Do they honestly think people will ignore that for another economy brand?
    Just lower the price of the tiguan, it’s extremely small for its price, you could get a much nicer and more reliable Tahoe, with more equipment, better build quality, and something to show for the money you spent.

  • avatar
    JD321

    VW should have had a RAV4/CR-V competitor years ago. They need a proper CUV that sells 10K units per month if they want to stay highly competitive. Unbelievable.

  • avatar
    mkeenly

    Tiguan, Touareg, Routan, blah, blah, blah.

    For the rest of us who like to drive cars, VW is not doing it for me.

    I own a 2003 GTI 20th Anniversary Edition, which I love. I’ve been waiting for a VW to replace it and was excited when I heard about the Golf R last year.

    Unfortunately, with it now available, I can’t bring myself to justify the $35K sticker price. Although the standard GTI is a great driving car, it is BORING, BORING, BORING (Did I say BORING?).

    VW just lost my business for the next 10 years as I decided to instead purchase a 2013 Ford Focus ST. Fantastic car, great option packages, excellent sales experience, and out the door for $28K, fully loaded.

  • avatar
    GaryM

    I have really enjoyed my ’11 Tiguan- so far (30k miles) it is has been fun to drive, reliable, comfortable and awesome in the snow. I do wish it had slightly more storage space. As for price, I bought a base model with 4motion for approx $25k new and it had all I needed. The more equipped models are over priced. Paying $35k for one would just be silly.


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