By on May 19, 2014

Volkswagen-CrossBlue-Concept

Though Volkswagen had plans to move 800,000 units annually out of U.S. showrooms by 2018, the automaker may now opt to dial back its ambitious plan in light of slow growth and falling sales.

The Detroit Bureau reports VW’s U.S. chief Michael Horn said his goal with the company for now is to focus on “realistic targets,” especially as sales fell against the harsh winter weather earlier this year, and though the main goal is still there, it will be reached in the long-term.

According to industry insiders, the automaker wants to be sure it builds the kind of vehicles the U.S. market desires — such as the upcoming CrossBlue Concept-based full-size SUV — even if it means holding back on products until they are ready for production. Another diversion from the 800,000/year road is China: financing meant for the U.S. market was diverted across the Pacific in VW’s fight to dominate the emerging market, which it hopes will happen by decade’s end.

That said, VW will likely turn more of its focus back on the U.S. in order to shore up its stake in the fight to take the top podium in global sales, such as the impending announcement of where the aforementioned SUV will be built. There, the plants in Chattanooga, Tenn. and Puebla, Mexico are in the running, though the former may be out due to the fallout surrounding the February 2014 battle between the UAW and anti-union forces over organization of the plant.

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44 Comments on “Volkswagen Dials Back On 2018 Milestone...”


  • avatar
    heavy handle

    Did they think they would hit that target without product? What exactly were they going to sell 800,000 of?

    They’ve got two products: Jetta and Passat. Both are overdue for refreshes, so no one expects them to set sales records. They also both compete in one of the toughest segments, where makers aren’t afraid to offer crazy incentives just to keep the metal moving.

    The Tiguan is in the fastest growing segment, but it hasn’t connected with American buyers. Everything else is niche.

    I don’t see how any self-aware auto exec could dream about double-digit growth with that starting lineup. It’s delusional.

    • 0 avatar
      CoreyDL

      Hey they sold lots of the original Touareg, I don’t think many are buying the gen2 though.

      • 0 avatar
        mike978

        I think they expected the Passat to sell as well as the Jetta did when it first came out. But instead of 15,000 units a month the Passat barely ever did better than 10,000.
        They need a CR-V competitor that is priced and equipped competitively and a Honda Pilot competitor. With those four models they could easily get 500,000 units. Then add their miscellaneous vehicles like the Golf, GTi, Eos, Touraeg and Beetle and you get somewhere towards 700,000. Then look at either the UP or Polo (or being radical a cheaper Skoda model rebadged) and you get the the “magic” 800K.

        • 0 avatar
          geeber

          I wonder if part of the reason for lackluster Passat sales is the close resemblance to the Jetta. When I see either one in traffic, I have to look twice to determine whether it’s a Passat or a Jetta. Perhaps customers don’t see the point of paying more to move up to the Passat.

          • 0 avatar
            CoreyDL

            Same unfortunately between A4/A6 and A6/A8

          • 0 avatar
            Kyree S. Williams

            Well, it’s not like a short-wheelbase F01 7-Series does a good job distinguishing itself from the F10 5-Series…and they both look like the 3-Series. But I agree that Audi could definitely use some additional styling to distinguish between models.

          • 0 avatar
            geeber

            BMW’s sales strength in passenger cars is based in the 3-Series.

            A 7-Series that looks too much like the two cheaper models in the line-up may not represent an ideal situation. It’s hardly a fatal mistake, however, for BMW.

          • 0 avatar
            CoreyDL

            The A8 used to have styling features reserved only for it, but now it does not.

          • 0 avatar
            geeber

            GM did the same thing with Cadillacs during its heyday. A styling feature would appear on a Cadillac, and 2-3 years later would show up on Chevrolets.

            It encouraged people to think of a Chevrolet as a “Baby Cadillac,” back when Cadillac was the most prestigious car in the country.

          • 0 avatar
            Lie2me

            That’s because the actual bits from the Cadillac ended up on the Chevy. The grille of a ’61 Cadillac became the grille of the ’63 Chevy and the “baby Cadillac” was born. The thing that GM has forgotten is that it’s OK to filter styling bits downward, but starting with a Chevy and moving up (Volt-ELR, Cavalier-Cimarron) to a Cadillac FAIL

    • 0 avatar
      philadlj

      The Jetta and Passat were a good start – a very good start – but then they just…stopped. To meet that 800K they needed a new model every year, and to open fronts in all of the hot-selling segments.

      The new Beetle is nice, but not a lot of people want two-door cars. A legit CR-V/Escape competitor never came, nor did a large, three-row CUV cheaper than the premium Touareg.

      When I think of successful U.S. model expansion, I think of Nissan. They have a little bit of something for everyone. They have every base covered, from mainstream sedan to sports car to cargo van, and everything in between.

      That VW didn’t keep their momentum going by promptly following up the Jetta and Passat with more products in more segments shows me that the 800,000-sale figure was always just a pipe dream. They were never serious about it.

      Also the “it’s taking long because we want to GET IT RIGHT” part they’re selling? I ain’t buying. It makes no sense to go years without entries in incredibly popular segments because you’re not sure whether those segments are incredibly popular.

      Porsche and Audi are doing well because they offer people what they want. The only problem is, VW hasn’t figured out a way to offer that same variety to Americans at a lower price point.

      • 0 avatar
        Kyree S. Williams

        A seven-passenger crossover based on the NMS Passat that features an abundance of cupholders and some modicum of storage space would probably be the easiest thing to implement right now. It’s also the product that people would pay through the nose for, especially if it was a VW, since even among non-enthusiasts the VW badge carries a bit of class and prestige not seen with Toyota, Nissan, Ford, Hyundai, etc. And this is the market that the CrossBlue’s production version will serve. Even if it eats some of the Touareg’s negligible market share, they need to go ahead and build it. It doesn’t seem that hard…

  • avatar
    snakebit

    First, the VW goal, set back around 2009, was for total product worldwide, and IIRC it meant Volkswagen and Audi in total. The mix of the goal projected to US dealers back then was roughly 3/4 Volkswagen and 1/4 Audi, plus niche brands.

    Second, in naming their products, why was Golf missing? Golf is the single largest selling model, worldwide for Volkswagen. In Europe, Golf is the Camry-Accord-Focus-Corolla,etc of the region, model against model. Golf often is the choice of police, their Crown Vic/Taurus pursuit in Europe. Granted, 800,000 units is still ambitious, but this gives you a better idea of where they planned to draw from to reach the goal.

    • 0 avatar
      Lorenzo

      The Golf is popular worldwide because it’s a fuel-sipping subcompact. It’s spacious for its class, but when big fanny Americans can get a bigger car for a few dollars more, they go for the bigger car every time. We also don’t care as much about fuel prices, since we pay half as much than the rest of world.

  • avatar
    gtrslngr

    ….. Slow growth … Lousy reliability ….. Horrid Dealer service … An even worse customer advocacy department … Abysmal treatment of its luxury/premium customers [ Audi ] … Incompetent mechanics in its service departments … Constant refusal to admit fault or enact recalls … etc etc etc …. ad infinitum .

    Add all that up and you bet … scaling back on future projections is the only wise course of action on behalf of VW-Audi USA !

    But … somehow I’ll still bet they’ll overtake GM for the #2 spot ! ;-)

  • avatar
    mjz

    It’s hard to know where to start. I used to work for the VW/Audi ad agency many a moon ago. They were arrogant and clueless way back then, and still arrogant and clueless now apparently. Some things never change.

    First of all, their attempt to become the German Honda/Toyota has been a miserable failure. They simply don’t and probably won’t ever have the kind of reliability that are the hallmark of the Japanese brands. People used to buy VW’s because they delivered a special driving experience and were the closest thing you could get to BMW/Mercedes caliber engineering for an affordable price. The latest batch of Jettas and Passats are decontented blandmobiles that don’t have the the sterling reputation for reliability of the segment leaders. VW has lost it’s unique positioning in the marketplace. That’s why sales are starting to fall off after the initial jump to buy these “value” VW’s.

    What VW has failed to realize is that customers are willing to pay a SLIGHT premium for a German engineered car that is not a Japanese appliance on wheels. Instead of decontenting, they need to recontent the cars, especially the base model of the Jetta (geez, get rid of that 2.0 on the S already!). Instead of offering a stripper Jetta S for $15,995, they should take a page from Honda and load the cars with more features and charge a bit more. I went shopping with a friend last week who ended up with a base Honda Civic LX, stickered for $19,900ish. She was impressed with all the standard features that this “base” car had. And the real kicker for her was the “standard” back-up camera. That clinched it for her.

    Anyway, in the short-term, VW needs to significantly upgrade the content on the Jetta and Passat. No strippers with 15″ wheel covers and chintzy looking fabric interiors. Give us a great base package and build from there. They could also introduce some interesting colors, how many shades of grey can they offer? Same for the interior color offerings. Offer a “Black Forest” version of the new Golf Sportwagen with all wheel drive, a higher riding height and SUVish cladding. Certainly works for Subaru with the Legacy/Outback.

    Long-term, they need to offer the UP! and Polo and Scirocco here. And of course they need competitive C/SUV’s in all segments, stat. And please, please don’t bring the Phaeton back again. If they do, it will indicate they are still completely clueless.

    • 0 avatar
      LeMansteve

      “Offer a “Black Forest” version of the new Golf Sportwagen with all wheel drive, a higher riding height and SUVish cladding.”

      If they are smart, the next Tiguan will fit this formula.

      “Long-term, they need to offer the UP! and Polo and Scirocco here. And of course they need competitive C/SUV’s in all segments, stat. And please, please don’t bring the Phaeton back again. If they do, it will indicate they are still completely clueless.”

      UP! might be a little too small for the American market. Just look at the abysmal sales of the SMART car and the Scion iQ. Scirocco, although gorgeous, would have a hard time fitting into their existing portfolio which already includes similar niche vehicles like the GTI and Golf R. Add to that the cost of federalization and you have a difficult business case for the Scirocco.

    • 0 avatar
      Kyree S. Williams

      I agree. For the longest time, VW’s mainstream range occupied a spot as a semi-premium brand that was clearly a cut above the rat-race occupied by the Japanese, Koreans and Americans. The immediately-previous B6 Passat and A5 Jetta were really good at this mission. The new Passat and Jetta, however, got decontented at a time when everyone else was doubling-down on the luxury. The Kia Optima is practically a luxury car if you get the SX-L trim, I don’t even need to tell you about the Ford Fusion, and say what you want about the Malibu’s shortcomings, but the interior materials and presentation are not among them. Then there’s the Cruze, the Forte, the Focus, and *oh*, that Mazda3. And the Passat and Jetta *certainly* can’t compete on the reliability front with mainstays like the Accord, Civic, Camry and Corolla. In some ways, the German sedans even come up short. Every other mid-sized car (except for the Malibu LS) has projector-beam headlamps as standard. However, you can’t get them at any level on a Passat…when the previous Passat had them standard. Even the lower-class Jetta has projector-beams if you opt for the GLI or Hybrid trims. So VW has, in effect, lost its niche in the market with those two cars. The only reasons to buy them at this point might be the sterile, sensible design and the celebrated TDI engines (though the Cruze now offers a diesel). You can still find some of that desirable German feel in products like the Golf, Tiguan, CC and Touareg, but all of those are basically specialty vehicles. Sales of the “NMS” Passat, in particular, are indeed several times higher than those of the old B6, but at a price.

      You know who the *new* Volkswagen is? Mazda. Now if they’d only hurry up with that diesel they promised us.

    • 0 avatar
      TW5

      VW was always de-contented simplicity, hence the name “Volkswagen”. When VW started adding content to satisfy middle-class Americans with powerful dollars, the VW brand started to sour. Sure, to the average layperson who’d never owned a Beetle, SuperBeetle or a MkII, VW’s new upscale offerings were an exciting bourgeois novelty. The people who understood the brand realized that bloat, poor reliability, and featherweight control weighting was going to hurt VW in the long run.

      VW were not wrong to return to the people’s-car-concept; however, they didn’t adapt the concept to new marketplaces.

  • avatar
    PRNDLOL

    Does anyone remember the year Volkswagen made the 2018 prediction?
    I want to say 2010 but that was after the bottom fell out in North America, and 2008 seems too long ago. Anyway, regardless I think the vast majority of us responding about the same way when we heard it: “Yeah sure, right”

    • 0 avatar
      SCE to AUX

      I was wondering the same thing, and remember doing the math for the APR growth required to hit the goal. At this point, 14% year-over-year growth is needed to hit 800k in 2018, about the same rate as needed in 2011 and 2010.

      VW may become the next Mazda in the US – stuck at a constant sales level.

    • 0 avatar
      th009

      It was 2008.

  • avatar
    CoreyDL

    That SUV would look jolly well in a dark graphite metallic with some tints.

  • avatar
    Acd

    Maybe this is where Sergio is getting some of his 150,000 Alfa Romeo customers.

  • avatar
    brettc

    Nice to see that they’ve finally admitted that they’ll never hit 800000 in the foreseeable future. They need to mirror Hyundai’s lineup (and throw in the Amarok or some type of pickup) and increase reliability – or even perceived reliability in terms of a much longer warranty, again like Hyundai. Then they need to offer more content in the cars they do sell. The 2.slow in the Jetta still has buyers but I agree that it is a sad engine to be putting in cars in 2014.

    The new Golf and Golf wagon look good, but no one can buy them at the moment so that’s not helping them for several months. An AWD Golf wagon would be a splendid idea. AWD wagons (on stilts) are definitely helping Subaru.

    I hope the Mexican workers enjoy building the Crossblue. I’d be really surprised if that ends up going to Chattanooga.

    • 0 avatar
      jpolicke

      VW tried the 10/100 warranty in the 90′s. They dropped it after only a few years, probably because it was bankrupting them.

      That 2.0 engine must cost pennies to build. Only 115HP out of 2 liters? Got to be embarrassing.

    • 0 avatar
      Kyree S. Williams

      It is still a lot more expensive for VW to produce a car than for Hyundai to produce a comparable car. A lot of the reason for that is that VW factories tend to have more components shipped in from Europe, while Hyundai has plenty of plants and suppliers here in the States and in other areas where cars are produced. I don’t think VW will be able to offer similar levels of equipment as Hyundai for the same price bracket anytime soon. With the Passat and Jetta, VW is sort of in a “damned-if-you-do, damned-if-you-don’t” situation. If VW had kept these vehicles in a semi-premium bracket, they’d see sales numbers that are *way* lower than what they have now. However, by de-contenting these cars in order to compete on price, VW has lost much of its allure.

      My thing is that I’d actually pay *more* for a Passat that had Optima SX or SX-L levels of luxury, than I would for an Optima SX. Why? Despite being a big fan of Kia/Hyundai, most of their products excel exclusively at the “gee-whiz” factor…as in “I get all of this neat styling and leather and these electronics and this big giant sunroof at *this* price?! Wow!” But where the Koreans fall short is refinement. Generally, VW does better with things like driving-feel, suspension, and especially the small touches. That’s evident as soon as you step up to something like the CC. But the CC is based on the old “B6″ Passat, which had all those same small-touches and refinements over the competition. And some of the de-contenting in the new Passat is just stupid. All 2012 Passats and all 2013 Passat SELs had a built-in rain-sensing module for the wipers. Why? Because the rain sensor was built into the same module as the ambient-light sensor for the automatic headlights. Several people have been able to use VAG Com to activate the rain sensor and get automatic wipers. So even if the automatic wiper function had only been factory-activated feature on SEL models, it would have been a distinguishing feature in the mainstream mid-sized class. Yet VW chose not to do this. Why?

      And they should have chucked that horrid N/A 2.0-liter engine when they chucked the 2.5-liter (which, albeit uncompetitive in terms of fuel economy, was at least a durable engine) in favor of the 1.8-liter turbo for 2014. I recently drove a late-model Jetta S with that engine in it, and it was miserable.

      • 0 avatar
        Slave2anMG

        Your second paragraph nails it. Last year I went for a CC instead of the Passat for exactly the reasons you mention. It just drove better than the current Passat; I was coming from a 2010 Jetta TDI Wagon which was one of the tightest cars I’ve owned. I had an ’07 B6 Passat wagon; apart from the rattly interior (CC still has that!) it was a fine driving car. But the current Passat…that 5 cylinder was agricultural. It just didn’t drive like a VW.

        Wiper module – VW makes me scratch my head a lot with stuff like that. Why disable the rear fog lamp on US market cars? Cripple other features that are freakin’ already in place? Strange.

  • avatar
    readallover

    VW has done a good job of getting people to buy a first Volkswagen. They have just never grasped the concept of treating them so want to go through the experience again. Too many one-and-done owners.

    • 0 avatar
      SCE to AUX

      “Too many one-and-done owners.”

      That’s me. VW needs to stop using the term ‘German engineering’. Korean and Japanese engineering has been working quite well for me lately.

    • 0 avatar
      TW5

      You’d think that a company with service-intensive vehicles and reliability problems would create innovative leases. To my knowledge, VW has never made leasing a priority, nor have they marketed CPO vehicle aggressively for a substantial period of time.

  • avatar
    TW5

    Volkswagen’s US strategy has always been a bit confused, but never more than now, imo.

    In segments where VW has little or no chance of success, like fullsize SUVs, they prepare new products.

    In wide-open segments, like CUVs or the new rally-hatch/rally-wagon segment created by Subaru, VW has very few products in the pipeline.

    In the midsize cars, VW under-promotes, despite having competitive vehicles. In segments VW owns almost exclusively (diesel cars), VW lets the segment languish is modest growth or stagnation.

    Does anyone have an explanation? Am I missing something?

    • 0 avatar
      mjz

      Yes, the explanation is that the VW German overlords are arrogant bastards who think THEY know what’s best for the American market. They think it is just fine to offer the latest Golf in America a year after its debut in other markets. Affordable/competitive C/SUV’s? Forget about it. The same thinking will get us yet another disastrous Phaeton Round 2. Until they treat this market with the respect it deserves, they will continue to flounder with products like the $15,995 Jetta S that has an engine that should be shot and put out of OUR misery. Aren’t you INSULTED they continue to try to foist that POS on the American public? Shame on them.

      • 0 avatar
        TW5

        The 2.0 is probably the harshest engine ever made, and it’s not terribly efficient, but it’s about the only part that won’t break in my experience.

  • avatar
    DavidB

    Is that a dead ringer for an Explorer or is it just me?


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