Volkswagen Cuts Sales Targets For US Dealers
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.
More by Derek Kreindler
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German automotive arrogance... annoying the business world since the late 1990's! How's that marriage of equals working out for Daimler... whoops, had to pay Cerebus $500 million at closing to take Chrysler off their hands! What's really interesting is how Audi seems to be locked in on their brand management/lineup while VW seems lost every few years... Porsche can just keep selling 911s funded by Cayennes, so they're OK. For being the 'same' company it's quite different.
I've had two VWs, and have been fairly pleased with them, but I could never understand their approach to the NA market. Whenever I talked about future product to the sales staff, their mantra was always the same 'they (corporate) never send us what we want'. To me, this is the exact opposite approach taken by both the Japanese and Koreans. Could this pig-headedness be the result of being dominant (air cooled era) for so many years and using the 'it worked before, why wouldn't work again' model?
I like VWs but I don't get what they're trying to do in North America. All that the German executives need to do is go to a computer and load hyundaiusa.com or kia.com and check out what their model range consists of. Then sell similar vehicles at competitive prices with both gas and diesel engine options in everything. And for good measure, sell the Amarok since the Koreans don't even offer a pickup over here. Throw a 100000 mile warranty on them and then maybe it'll start to slowly erase the "VWs are POSs" stigma. It's worked for the Koreans so it could work for the Germans as well, assuming they don't f*ck up the execution of it. Which they probably will, then they'll blame Americans/Canadians for being too stupid to buy their cars.
A 46,000-unit correction, eh? That's all? Let's look at how the segment VW doesn't compete in did in 2012: 1. Explorer: ~164,000 2. Grand Cherokee: ~154,000 3. Edge: ~127,000 4. Highlander: ~121,000 5. Sorento: ~119,000 6. Pilot: ~119,000 ... 13. (BOF) 4Runner: ~48,000 14. (BOF) Pathfinder: ~42,000 ... 20. Toaureg ~10,000 (Source: Tim Cain's GoodCarBadCar) All VW would've needed to fill that gap was a moderately-successful Passat-based mainstream CUV. So...where is it?