Despite planning to sell 486,000 units in America this year, Volkswagen has trimmed its sales targets to 440,000 units, after shedding market share in the first half of 2013.
The slowdown is sales has caused Volkswagen to offer aggressive incentives on vehicles, such as 0 percent financing across the board, while workers at its Chattanooga plant have been laid off. Inventories of VW cars remain high, and have risen to 105 days supply as of July 1st, up from 92 days in June. Dealers are crying out for key products like a mid-size crossover, but so far, Volkswagen has only announced a revival of the failed Phaeton luxury car.
On the dealer side, Volkswagen has been struggling with an unhappy dealer body, which was ranked last in a NADA survey. A reworking of VW’s bonus complicated bonus system for dealers, which ended up undoing some of the changes made in January 2013, helped boost satisfaction levels, but dealers are still facing a tough time after three years of rapid growth.