It’s time to talk about Volkswagen. You know Volkswagen: they make the Jetta, which is possibly today’s most adept compact sedan at churning out lifelong Toyota customers.
I bring up Volkswagen because I wrote a column earlier this week about Volvo, and both of those brands share something in common. Is it that they’re the only car companies that start with “V”? No, not at all. You’re forgetting about Venturi, a sports car maker that somehow went bust despite being located in the global industrial manufacturing powerhouse of Monaco.
No, the thing Volvo and Volkswagen have in common is that both automakers saw a decline in sales last month compared to August 2012. That’s bad news if you’re Volkswagen or Volvo, because the entire rest of the auto industry was up. That’s right: every other brand saw an increase. Even Rolls-Royce had a banner month, eclipsing last August’s total by a whopping five vehicles.
Anyway: the reason I bring this up is that it would seem Volkswagen is in trouble. You see, we already know Volvo is going down. That article a few months ago that said they wouldn’t live to see 2015 proves their demise is imminent, no matter how many LEDs they cram on to the front of the next XC90. So Volvo was down, and we expect them to keep being down until they wither away, leaving people in the Pacific Northwest with nothing to drive. (Don’t worry: they will find a solution that involves hemp.)
But why was Volkswagen down?
Volkswagen, for those of you who don’t know, is the world’s most sales-obsessed corporation. I know this because I’ve read perhaps 4,000 articles about Volkswagen’s obsession with some pie-in-the-sky volume goal for 2018, and I’ve never read a single article that covers any concerns they might have about, oh I don’t know, profitability. In fact, I’ve read so many stories about Volkswagen’s volume goals that you’d think they were punching each article as a retail delivery.
Because of this, I’m going to assume they don’t care about profitability, only volume, which leads me to the point of this column: Volkswagen is desperately in need of a new lineup.
I discovered this on a recent visit to Volkswagen’s website, which I highly recommend visiting if you get excited about the Futura font. Listed there, on Volkswagen’s website, in Futura Light and Future Medium and Futura Bold, is a lineup that does not, under any circumstances, represent a full-line automaker in the United States.
To understand what I mean, let’s turn to SUVs, and let’s turn to Toyota. Toyota sells, at last count, seven different sport-utility vehicles, all of which compete in different segments. I have no idea how Toyota managed to do this. Really, they created micro-segments, skillfully convincing customers that the RAV4, the Highlander, and the Venza are very different cars, purchased by very different people, and you should buy this one because it has the most dealer markup!
Meanwhile, Volkswagen sells two SUVs. You have the Tiguan, which starts at a reasonable price until you discover it comes standard with a stick shift. Throw some options on and the Tiguan can climb to nearly $40,000, a figure also defined as “roughly 1.5 times what anyone in this segment wants to pay for a car.”
There’s also the Touareg, which starts – starts – at $45,000. Mind you, this is supposed to be Volkswagen’s competitor in the high-volume midsize SUV segment. So how does it compete? Last year, Toyota sold 121,000 Highlanders. Ford sold 128,000 Edges. Chevrolet sold 219,000 Equinoxes. And Volkswagen sold 10,553 Touaregs. Ten thousand five hundred. The Porsche Cayenne, its own sister vehicle, outsold the Touareg by roughly 50 percent.
Things aren’t very different if you turn to VW’s car lineup. Yes, they still sell the Jetta, which competes with glitter for the top spot on the “annual spending by sorority girls” list. And they sell the Passat, which is slowly becoming an acceptable midsize sedan thanks to offers like: Zero percent interest for the rest of your life!
But aside from those two, we have the Golf, which very few people buy; the CC, which even fewer people buy; and the Eos, which – this is entirely true – now starts at $36,000 without any options.
If we go back to Toyota, Volkswagen is missing out in several segments. Scion may not be a force, but it sold 74,000 units last year. The full-size Toyota Avalon accounted for 30,000 sales. And the subcompact Yaris was 31,000. But Volkswagen’s biggest loss to Toyota comes in the world of hybrids. Last year’s Prius sales? 237,000. Last year’s Jetta Hybrid sales? 162. Not thousand. One hundred and sixty two. In fairness, the Jetta Hybrid may not have been on sale the whole year – but I wouldn’t know, because I’ve never actually seen one.
And so, I repeat my point: if Volkswagen plans to hit these crazy volume goals, it’s time to get a new lineup. A few more cars; a few more SUVs. A hybrid. And maybe something made from hemp. After all, someone has to cater to those Pacific Northwest buyers once Volvo leaves.
@DougDeMuro is the author of Plays With Cars and the operator of PlaysWithCars.com. He’s owned an E63 AMG wagon, road-tripped across the US in a Lotus without air conditioning, and posted a six-minute lap time on the Circuit de Monaco in a rented Ford Fiesta. One year after becoming Porsche Cars North America’s youngest manager, he quit to become a writer. His parents are very disappointed.