By Justin Berkowitz on February 20, 2007

vw_rabbit_emblem222.jpgThe automotive media have their hands full chronicling the slow motion train wreck known as The Big 2.5. But there's another pile-up in progress. Here in the States, Volkswagen of America (VWoA) has transformed itself from a highly profitable purveyor of mesmerizing motors to a struggling brand with an ugly, overpriced and unpopular lineup. To properly parse this fall from automotive grace, let's start with the Phaeton. 

The Phaeton was VW's uberluxe sedan. The concept was so brand-defiling that the normally sycophantic buff books felt free to unleash juvenile taunts about the $70k “people's car.” While the VW-badged Mercedes tank killer gave birth to the immensely lucrative Audi A8 and Bentley Continental GT, it was an epic miscalculation that revealed a startling lack of focus. 

The Phaeton landed in America (with an almighty thud) in 2002. By then, the company's wandering eye had placed its U.S. operations in harm's way. The core of their product portfolio– which is to say every car other than the Phaeton– was decidedly stale. From 2001 to 2005, VWoA sales fell down some 37%, to 224,195. Even worse, the Germans didn't seem to care.

The Jetta and Golf ranges exemplify the product neglect. While the rest of the world savored the Golf MK V in 2003, the older MK IV models hung around in the U.S. until 2005. The competition grew larger, more powerful and less expensive; the centerpiece of VWoA's U.S. lineup stood still. Volksie's rep for clever and compelling advertising nosedived as well; the brand lost both its populist edge and its competitive advantage.

When the new Jetta and Golf Rabbit finally arrived (last year), the real trouble began. Whereas the previous Jetta was a tidy, micro-luxury car that epitomized the VW-Audi design language of the day, the new Jetta looks like a badly photochopped Toyota Corolla. Bizarrely, VW nailed the Jetta's design in Europe; subsidiary Skoda’s Octavia is a far more coherent proposition. 

The Golf arrived in better shape, spared the Jetta's awkward C-pillar and rear end. But the company's decision to retrofit the new model with the old American Rabbit nameplate (foreshadowing Ford's Taurus recall) highlighted their creative distress. Clearly, VW's US executives were trying to hearken back to a kinder, gentler time– before Japanese transplants stuffed the U.S. car market full of highly evolved and constantly evolving small car choices.  

VW has also widened the schism within its products' personalities. While the current GTI's engine makes it a terrific hoonmobile, the Rabbit's, Bug’s and Jetta's powerplants are less fun than a Form 1040. Their 2.5-liter inline five cylinder mill combines the fuel economy of a six (25mpg) with the power of a four (150hp). It's slow and buzzy AND loses the mission-critical fuel economy sweepstakes to its 35+ mpg Japanese and Korean competitors.

Diesel engines might have rescued the entire VW lineup from such ignominy. Unfortunately, the VW Group's amazing range of fast and frugal oil burners fell afoul of California emissions regulations. Next year's California-compliant Bluetec clean diesel could presage a turnaround, but VW should have found better motorvation in the meantime. Where is the magnificent Twincharger engine, with a supercharger and a turbo, putting out 150 horses while yielding 40 miles per gallon? 

Meanwhile, VWoA has failed to leverage its brand equity to exploit new niches. The Touareg SUV was a start– and a lousy one at that. Sales of the unpronounceable, under-promoted, gas-hungry five-seat off-roader fell 43.7% last year. The equally unpronounceable Tiguan CUV arrives sometime next year to take on the updated CR-V, Freelander and others. Given the large temporal stretches between VW model updates and their U.S. appearance, we could be looking at a provisional respite.

As other manufacturers deliver new compact cars, VW's showrooms are bereft of four-wheeled frugality, save for ageing Jettas and Bugs, expensive Golfs and unattractive Passats. Volkswagen already makes a sub-Golf car, the Polo. That should be the new Rabbit. And if we're looking for opportunities, what happened to the VW Bus concept– a slam dunk if there ever was one?

As far as anyone knows, Volkswagen still wants to sell small cars at premium prices. News flash: to do that you must offer something premium. Standard leatherette isn’t enough. Vee Dub’s once legendary reliability is now among the worst in the U.S. market. The brand's charming design and class-leading driving dynamics are also fading into the mist of time. 

Toyota has proven that you can conquer the world with focus, flexibility and, above all, speed. If VW wants to get back into the race, it must realize it IS a race. It's got to find new niches, refresh its models more quickly and get ahead of the powertrain development curve. If it wants to succeed stateside, the stodgy German brand must get its Fahrvergnügen on.

119 Comments on “Volkswagen’s US SOS...”


  • Vega

    I agree the model lineup is not the most attractive they ever had, but I think the quality is on the way up again. Recently a Golf 5 achieved a top result in “Auto Motor und Sport”’s 100,000km test (and before you shout ‘bias!’, the Golf IV had one of the worst results in that test).
    In terms of prices, VW faces a big problem: Many of their cars are built in Europe. In the last 4 years the US Dollar has lost almost 40% of its value against the Euro, so staying profitable is a tough job. Just ask GM what they earn on their Saturnized Opels.

  • Tore Softing
    tsofting

    Justin, another to-the-point analysis, well done! Now, I also wondered when I heard VW were bringing back the Rabbit name to the US. As far as I can remember they got rid of it 20+ years ago partly to change the image of the Rabbit/Golf from a mini-Malibu to a “real” Eurocar. Have all the employees of that era left VWOA, or have they been struck by amnesia – or maybe they assume the everybody else have forgotten?

  • bfg9k

    The Microbus concept car (see http://www.motortrend.com/future/concept_cars/112_0107_volkswagen_microbus) was SO cool. As much as our Honda Odyssey is a terrific vehicle, I would have bought a Microbus in a heartbeat over any other minivan.

  • Stein Leikanger
    Stein X Leikanger

    A number of car manufacturers have spent the past decade building cars they would want to appear with at Motor Shows, instead of cars that would move off the sales room floors.

    VW is probably the worst example of the bunch, since they departed as far as they did from their bread and butter platform.

    If you want a good VW today, buy a Skoda.

  • philbailey

    Seems as though VW took every available engineer and put them on either the Phaeton or the Veyron projects, in the process ignoring the rising clamour of warranty claims from dealers. Starting off with the replacement of half a million ignition coils and on and on.
    A word of advice: Whatever you do, stay away from any used VW equipped with a turbocharger.

  • Justin Berkowitz
    Justin Berkowitz

    Stein X Leikanger:
    If you want a good VW today, buy a Skoda.

    I could not possibly agree more! Unfortunately, the great Skoda lineup is not on sale in the US, one of VW’s biggest markets.

  • disgruntled

    The Tiguan interests me, but I know it’s going to cost $10,000 more than a Honda CRV when it hits the dealers (in Canada a VW Toureg (V6) starts at $50,000, a Honda Pilot (V6) starts at $35,000). I don’t remember the last time Consumer Reports has recommended a VW; which makes sense since my sister bought a new Beetle a few years ago and has had too many problems to mention. The brand simply doesn’t represent value and reliability anymore, and compared to Lexus or BMW, it doesn’t represent luxury or performance either. The VW brand pretty much represents “arrogance” now at the prices they expect people to pay for their Mexican built vehicles with unpronounceable names.

  • Jay DeZinno
    jaydez

    I test drive an 07 Rabbit last summer when they first came out. I will never buy a VW after driving that thing. It was way over priced. The thing performed like crap… oh, and it broke down leaving me, my brother, and the salesman stranded on the side of the road… it had 300 miles on it.

  • gerald weber
    jerry weber

    As one who appreciates vw’s styling and brand missmanagement, I have to ask you do one thing before you dismiss them. Drive a small something else, then drive a new VW. They have a European feel and finess that is not available from toyota etc. If they couldl get their styling and marketing arms correct, I believe they could be a success again in the US>

  • MW

    “The VW brand pretty much represents arrogance now”

    How true.

    In various forums, I’ve seen VW fans begging for the following things for years:

    - new microbus, with a camper option
    - small, efficient cars (aka Polo)
    - diesel engines

    Instead, we get $20K Golfs and more compact SUVs that nobody really needs.

  • ash78

    For the money, I’ve yet to find a marque that I consider as much a “drivers’ car” as VW. I may have a love-hate bias, having owned only two VWs in 13 years of driving.

    The first, a 1995 Golf 2.0 was fun as hell compared to the comparable civics of the day, although slow and unreliable long-term. While it was worthwhile to have something unique and engaging, I wouldn’t wish that car on anybody.

    In 1998, VW really entered the midsize fray with the Passat (B5). If anyone doubts the role that car played in VW’s ensuing several years of relative success, just look at the one-year leap (97-98) from bottom of the pack to the top–C&D, Motor Trend, even Consumer Reports. For the money, this was simply the BEST car you could buy in the segment. It made the Camcords look like tinny, bargain-basement econoboxes with its Audi-level NVH and smoothness and introduced an otherwise indifferent buying segment to “the fun of driving.” Never mind that the car went through EIGHT years of virtually no redesigns, during which time it was fully lapped by the Camcordima (at least on paper).

    The new ones, meh. I might jump on a tdi Jetta Wagon for my wife, but everything else they are selling is overpriced and ugly as hell.

  • ben lokiec
    kasumi

    Lets not forget the awful dealers!

    VW is just not watching Honda – how long before we finally got a new Golf/Rabbit or Passat. The Passat design was out forever… but took such a long time to make it into production. Even worse – the Beetle, they haven’t touched that thing is so long. I thought the Ragster was pretty cool, but instead we are supposed to get a new Scirraco(sp)? An Eos – VW needs some focus.

    However, I think the R32 is great and the Phaeton is now an awesome value!

    K.

  • Erik Jacobson
    ejacobs

    “German engineering in the haus.”–hilarious GTI commercial

    Too bad German engineering also means more gremlins than you’d care to think of, and too bad the Rabbit is so mediocre. It looks like a nice evolution of the last Golf, but it’s actually heavier and bigger. I agree, Justin, the Polo should have been the new Rabbit. I don’t see why the Polo wouldn’t be a hit here in the states as an alternative to the Honda Fit, which is a superbly fun, practical, and economical dorkmobile.

    It seemed like Volkswagen was running wild all over the US car market just 5 or 6 years ago. It’s amazing where they are now.

  • Glenn A.

    Well, Volkwagen could always ’start from scratch’ and dump the VW brand in the US, and bring in Skoda instead. It’s not like VW would be missed by virtually anyone. The quality sucks and virtually everyone knows it (though I have to admit jaydez’s comment about the 300 mile odometer brand-new-VW leaving them broken down along the side of the road WITH the salesman is the FIRST time I’ve ever heard of that happening with a brand-new car). Man, how embarrassing that had to be for the poor salesman – and I think that’s the first time I’ve ever felt a pang of pity for a CAR SALESMAN! Ha.

  • Jaap Jacob Johannes Pesman
    JJ

    Where is the magnificent Twincharger engine, with a supercharger and a turbo, putting out 150 horses while yielding 40 miles per gallon?

    It’s already delivering more power than 150 HP and it’s in Europe.

    Thing is though, TopGear’s Jeremy Clarkson said the engine was rubbish, with a very weird powerband. Then again, JC also bought a SL55AMG…

    However, recently he DID buy a nice car (Gallardo Spyder), so I would say the evidence is inconclusive.

    - new microbus, with a camper option

    VW California

  • Ashy Larry

    I have first hand experience with the decline of VW’s quality. I owned a 1986 Jetta that needed oil and filter changes and an exhaust system in 70k miles of driving (on top of the 76k miles put on it by the previous owner). I bought a 2000 Passat that was solid and clearly outshone comparable offerings from Honda, Toyota etc. I kept it for a few years and 30k miles without incident until I was lured by a ports car. Now, looking for a frugal car, I bought a CPO 2005 Golf TDI that had 19k miles on it. Within 2 months the car had nuked two transmissions, the brakes had gone shaky, a door seal started leaking water onto my lap when it rained and the AC went out. Compunding these problems, it took three trips to the daler to convince them the first transmission was shot, and three trips to get them to fix the AC (they duly charged me $180 for a recharge that didn’t fix the problem because, as they later discovered, a wire was disconnected).

    I can deal with a fussy car if the dealer is competent, pleasant and knowledgable. I got none of the three in my dealings with VW’s dealers who seem not to understand that premium pricing makes us expect premium service — and I didn’t even get mediocre service.

    So I bailed on VW — painfully, as I had been a long time VW owner and was drooling all over a nice GTI 5-door — and instead bought a Saab 9-2x Aero at a steep discount (Subaru reliability and a Saab warranty). VW won’t win me back anytime soon. They lost focus on their products and quality control in the pursuit of luxury cars that Audi should be selling.

  • gfen

    Fahrvergnügen, indeed. They’re fun to drive. We’re a two VW family, currently an ‘01 NB and a ‘05 Golf TDI. There was a brief relationship with an ‘02 GTI, til someone ran into me (protected me well, though).

    They’re fun to drive, and they feel good. Even the economy, low power engines in our current cars FEEL like they’re faster, and seem to handle well enough for my non-hoonage’ing.

    I’d like to see more AWD options, or a RWD Scirocco 3. Honestly, I’m not looking forward to a New Beetle redesign, I think it works just fine as it is. Some things are timeless. I didn’t understand the I5 engine, because as people have said it doesnt’ seem to offer the best of anything.

    The MicroBus would’ve been a groundbreaking design and a big win for VW, although I don’t neccessarily agree with the Polo. Everyone here seems to talk about how they want smaller cars, but as soon as you hit the road and your little Polo is boxed in by H2s, Escalades, and tractor-trailers, I think the thrill of small will wane quickly.

  • MIke
    jerseydevil

    I’ve always wanted a VW camper. If my german is working, i think its called “California”. HA.

    I own a 95 Golf, it has 200K miles on it, it has not been cheap to maintian – however – it runs! I hoon less with it now in its dotage, but i did a week ago, it STILL brings a smile to my face! What a great car! Big enough to hold its own on our mega vehicle choked interstates, small enough to park in tiny spots in the city. Can carry four adults and luggage at the same time, or haul a ton of stuff with the seats down. Amazing vehicle. The paint is only now begining to fade, the upholstery shows no sign of wear, all the swichgear as well as everything else works. As does the power sunroof.

    It sadly will not last forever. I will need new wheels eventually. What will I buy? A Honda FIT? Cool car. A GTI? WOW – but if im gonna go to 25K there’s others to consider – A LOT of others. I really like talking about cars, HATE having to choose one to buy. Damn.

    Perhaps a used Phaeton? I want one! I have seen them here in Philadelphia, they are really large, parking would be a problem. But OH BOY. I could get used to living like that!

    Pity VW is having problems. I think that they are recoverable, tho. Bring to Polo in, the cool engines (the current 200 HP turbo is a great start), the real world engineering that VW is known for, they will be fine.

    At least I hope so. I would miss them.

  • Michael Karesh

    People do tell me of problems, some of which VW doesn’t know how to fix, and even buy-backs with their new VWs.

    But overall both the new Jetta and the new Passat are posting decent repair rates in my reliability research:

    http://www.truedelta.com/results0906.php

    I’m about to release updated results, where they rank about the same. Of course it’s still early in these cars lives, and long-term durability could be problematic. But right now both models are looking pretty solid.

  • Voice of Sweden

    Wikipedia:
    The Phaeton’s platform, the D3 platform, is shared with the Audi A8, Bentley Continental GT and Bentley Continental Flying Spur. D3 platform is constructed from high strength steel while Audi A8 is made in a different factory, on a different platform, using an aluminium space frame. This choice of metal is for reducing the production cost as to make Phaeton about 20% cheaper than comparable rival vehicles.

  • MW

    How can you create a vehicle called the California and not sell it in California? That’s just cruel!

  • kph

    VW’s do have one “premium” feature – safety. Passats, Jettas, and Rabbits have perfect crash scores in every measurement by the IIHS (edit: actually Jettas and Rabbits miss only one), something that’s matched only by the Audi A3 (also VW) and the Toyota Camry in the mini through midsize car segments. Stability control is also readily available. Funky styling can be attributed to their dedication to pedestrian safety.

    But it’s going to take a couple good years to get over their reputation for poor reliability.

  • Justin Berkowitz
    Justin Berkowitz

    kph-
    I agree, and it’s a boon for VW. In fact, it was a large part of my decision to purchase a VW. But other brands are really getting quite good in the safety area – look at the IIHS results for cars like the Subaru Legacy, Impreza, Honda Civic and Accord, and Nissan Versa.

  • Snehal Parmar
    CellMan

    Great article. I’ve long been pained to see the self destruction VW has been doing in North America. They do have some great products and potential. They still could survive here, iff:

    - vastly improve dealer network and customer care
    - bring the Bluetec engines here now, and make ‘em available to all models
    - bring the Polo; the Lupo would be too small
    - concentrate on fixing your quality and reliability across the board
    - the Microbus concept is a winner; it still represents the rapidly fading image of what VW was, funky, fresh, hip and populist. Ditch the DCX minivan and build a real Volkswagen, the Microbus concept. I would buy one in a second.
    - fire Piesch and remove him from the board once and for all
    - do not lose focus of your core products and markets; the Veyron is a nice result, but it shouldn’t have been at the expense of your core products

    On another note, there was something I have always wondered about, though it may be a contentious issue. Are Mexican built VWs less reliable than German-made VWs? I seem to get the sense that this is the case from lurking on forums, but wondered if there was any hard evidence.

  • Dave S

    Interestingly in Canada they have the so called “City Golf” which is the old style Golf with low equipment levels at discount prices. This is by far their most in demand model currently …

  • Marc Zurfluh
    JuniperBug

    I own a ‘92 Jetta 2 door. I have LOVED this car. The styling is simple, honest and distinctly Teutonic. Although it doesn’t offer many bells and whistles (even for a ‘92), to me it gives off an air of quality and sound engineering. The interior, with its non-cloth headliner feels to me as German as an automotive interior can get. Everything is simple, honest and just plain works (my car has 155k miles on it). Despite being distinctly narrow in width and weighing in at just slightly over a metric tonne, the thing offers seating for 4 adults and a cavernous trunk. The car is by no means fast, but its flat powerband, light weight and direct steering make it FUN. Hell, if you look at the tire pressure specs on the door jamb, it gives you one value for driving under 100 MPH, and another value for driving OVER 100 MPH! I perceive it to be a high quality economy car, where its build quality, engineering and character easily deserved a price premium over some of its competitors at the time.

    With all that said, I don’t foresee buying any VW past the ‘92 model year. As of the Mk3 Golf/Jetta, when all production was moved to Mexico, they became bloated, featured fussy styling, and in my eye lost that feeling of German quality. I work at a parking lot, and as such drive (briefly) about 40 vehicles per day, and I have NEVER come across a Mk 3 VW that didn’t feel like crap. The Mk 4 and 5 are better in this regard, but have sold out fun and simplicity for glitz, heft and luxury. The cars offer a completely different character and seem to be geared towards a different kind of buyer than what the VW’s of the 80’s and early 90’s were. And it isn’t me.

    When was the last time you heard a VW commercial talk about Fahrvergnügen? To me, the marketability of VW as a fun, well-built driver’s-car-for-the-people died with the ‘92 GTI 16 valve.

    Can someone explain to me why VW needed to abandon its core values to move upmarket, only to encroach on Audi’s territory?

  • chuck goolsbee

    Oddly enough, I seem to been immune from any of the “quality” issues in the last two VWs I bought, a ‘99 New Beetle and a ‘02 Jetta TDI.

    The Beetle had a few issues that were covered under warranty in its first few months. Then ran pretty much perfectly, requiring only oil changes, a battery, and tires for the next 5+ years. It was sold last year, with 178,000 miles on it and somebody paid me $5100 for it!

    The Jetta has been absolutely stellar. The only issue it has ever had was the passenger-side window motor failed three months into ownership. Repaired under warranty. Since then, it has run 105,000 trouble-free miles. The radio has lost the FM band for a monh or two twice… which is just bizarre, but in no way any bother for me as I usually just listen to my ipod via a cassette adapter anyway. On top of all this, it *averages* 50 MPG for me. The worst mileage I’ve seen was 43 MPG, and that was going 80+ MPH into a 40+ MPH headwind all day long. The best I’ve seen is 69.7 MPG, and that was driving like a octogenarian for half a tank… which was about all this lead-footer could manage before I went insane.

    Despite all of what I just say, I don’t doubt any of the statements in the article above. VW does seem rather directionless, and other than my cars, does seem to have some reliability issues. The Phaeton was a complete waste of time. The Toureg is an embarrassment. Their prices across the board WAY too high.

    I was lucky when I bought my Jetta. The masses had yet to clue in on Diesel (something I’ve been driving since my very first car, a 1980 Rabbit Diesel) and dealers could not move them. I walked onto a lot in Bellingham, WA and found this Jetta which had been sitting there for months, and made a lowball cash offer and drove away for under $18,000. Now the rip-off artists are charging 2x that for anything with a TDI in it because people want them. I haven’t seen a TDI anything new under $30,000 in the past 4 years.

    “People’s car?” Um, no. No wonder VW is in trouble.

    –chuck

  • Justin Berkowitz
    Justin Berkowitz

    Dealer gouging on the TDI models is horrific. It’s especially bad in states that follow CA emissions (New York, Maine, Massachusetts, Vermont), where new TDI cars have not been available for several years. Dealers charge new car prices for 3-year old VW TDI cars with 40,000 miles on them.

  • Alex Rashev
    Alex Rashev

    It really bothers me that all german cars have lost their former teutonic design cues. An average Acura looks more german than a BMW – can somebody explain why?… New VW’s, bangle BMW’s, and quad-eye Mercedes are the ugliest, most metrosexual cars on the road, bar none. You have to really hate yourself to drive them.

    Well, maybe that was a bit harsh, but I do think that Germans have been loosing it lately. Unless they get their priorities together, they’ll get slaughtered by Japanese and even American competition.

    Hopefully Porsche will buy VW and clean out the house, it seems like a good time to do it.

  • TreyV

    Excellent article!! Incisive, lucid and efficient writing free of distracting, over-the-top metaphors.

  • ash78

    Alex Rashev
    Ever since the 1980s, the Japanese have typically borrowed German styling and instituted it one model cycle later, improving the reliability and dumbing-down the feel (yes this is a blanket generalization, but pretty accurate).

    However, I feel that many current Japanese offerings, like the Acura 5-seri…er, TL, and everything from Lexus do a better job with the evolution of European styling than the Europeans themselves! (at least for US offerings). I miss Bauhaus and clean lines–blingery and flame surfacing needs to go away.

  • Alex Rashev
    Alex Rashev

    As for diesels, check this out: right now somebody is selling an 84 Diesel Jetta on craigslist in DC. Non-turbo. The car’s rear end is DEAD – rust, damaged quarter panels, trunk, bumper, taillights – all smashed in. Asking price is $950, and I bet it will sell, too. An equivalent car of the same vintage and damage, but not diesel, would hardly sell for a $100.

    Everybody wants a diesel these days.

  • Marc Zurfluh
    JuniperBug

    Alex,

    I agree with you completely regarding the styling of German cars. Just yesterday, I was admiring a previous-generation 540i and thinking how much better it looked than the current one.

    VW, BMW, Mercedes, Audi, Porsche all used to feature styling that was somewhat boxy and sharper creases when compared to other contemporary models. And I can’t think of a better way to describe it than “honest.”

  • ash78

    VW stock is rocking along nicely, up about 40% in the past 6 months.

  • Brian Hendrickson
    ZoomZoom

    Hey, maybe VW will merge with GM along with Nissan, Chrysler, Ford, and my kitchen sink!

    If we have five badly run companies, let’s combine ‘em all and make one really big badly run company! Everybody’ll like that, the press will jump for joy and the boards will get their parachutes.

  • hondaboy55

    Yup – We could call it Government. ” World Government…”

    We could call it ” the UN “

  • Armando Muir
    quasimondo

    How can you create a vehicle called the California and not sell it in California? That’s just cruel!

    Cruel is making every bolt an Allen head intead of a standard six-point bolt. Allen head bolts are for putting together Ikea furniture, not a car.

  • Robert McKenney
    shaker

    I owned a partially rusted-out ‘76 Rabbit (Wolfsburg), and I had more fun in that car than almost any other. The New Rabbit appeals to me also, but like an attractive woman; very desirable, but possibly “high maintenance”.

  • Lucas Zaffuto
    lzaffuto

    “How can you create a vehicle called the California and not sell it in California? That’s just cruel!”

    Maybe the German populace suffers from Californication?

  • dmw

    I have to disagree that the model line up is unappealing or poorly structured. It ignores certain facts. Specifically, its not true that Jettas and Golfs only have boring 150 hp motors or TDI, and are thus boring. You don’t have to get a GTI/GLI to get the 200hp 2.0FSI and DSG gearbox with big alloy wheels. Just ask for it. I have that package in my 2006 Jetta, and, with nice leather and a bit of wood, it beats the TSX with a stick, so to speak, on price or otherwise.

    But, VW does not market this car. Even dealers don’t keep many in stock. The problem with VW is that, chastened by the Phaeton situation, they are hewing way back to their core image. I.e, they want the GLI/GTI to be the traditionally quirky plaid-seated VW sports sedan, and the other Jetta/Golfs to be practical cars des Volkes. They leave a gap, because they don’t want to compete with corporate cousin A3 and its small niche — and to make sure people who buy base A4s don’t realize they dont need to get ripped off to get an affordable german luxury sedan. The irony to me is that the platforms and technology VW has today is top class, but their marketing is still basically defensive, instead of selling what they have.

  • Paul Niedermeyer
    Paul Niedermeyer

    Good article, but a couple of points:

    You say VWoA was “highly profitable”. In the late 1960’s, yes; but if you mean in recent history, I don’t think so. Even when sales were on an upswing a few years back, it was a problem child for VW. The exchange rate, warranty costs, dealer support, etc. has been an issue for years. It’s obviously gotten worse.

    The reason the Golf V/Rabbit came so late to NA is because its too expensive to make. The new multi-link rear axle costs over $500 more than the Golf IV axle. That is why the City Golf is selling well in Canada, and also why Opel has stayed with their simpler rear axle in the Astra.

    This expensive axle is one of the biggest management issues at VW headquarters now. The Golf V (and variants) profitability in Europe is down. That’s why the coming Audi A1 will use the Golf IV axle, and very likely a new US bound car will also go back to Golf IV platform.

    This cost problem is exacerbated in the US, with the exchange rate and the even more price sensitive market for smaller cars. VWoA losses were over $600 million, and may hit $1 billion. Not pocket change.

  • Jay Shoemaker
    Jay Shoemaker

    The other interesting part of the VW saga is the recent sacking of Wolfgang Bernard by the incoming Chairman Winterhorn. In addition to losing one of the best and brightest car guys in the business, Dr. Winterhorn is also reviewing all of VW’s new product plans, delaying them to market and possibly killing some of the good stuff.

  • NoneMoreBlack

    Where is the magnificent Twincharger engine

    As mentioned above, Clarkson is not exactly beaming with delight at the mechanical ingenuity of the Twincharger. He exceeds his own vitriol in deriding the twincharger’s power delivery, in a thorough enough manner to give me cause to believe he isn’t just being over-zealously himself as he is wont to do.

    I haven’t pinned down any other decent reviews of it though, so maybe he is simply focusing on a relatively small fault, though I doubt it.

  • Sean Goldstein
    SherbornSean

    This is an interesting editorial. Good to see TTAC bringing the truth to someone besides the Big Two Point Whatever. VW really lost touch with the largest market in the world — not clear how they think they can compete by bringing their mainstream vehicles to market 3 years late. When competitors are on a 4 year product cycle, that’s a recipe for disaster. Now VW has to compete on price, bragging it has 3 models for under $17K.

    Slightly off topic, but I think there is a ray of hope for GM. As carnuts get turned off by the German’s attempts to move upscale, it leaves a product niche wide open: the fun to drive sports sedan for enthusiasts.

    BMW and MB are too upscale now, and Mazda has been moving in this direction. But the Opel-Saturns and Holden-Pontiacs are moving there too. I hope it brings them success if only because I want to see more fun vehicles in the marketplace.

  • Vega

    While the loss of Bernhard may have been unfortunate, I think getting rid of Pischetsrieder was the right move. Remember he was the man behind BMW’s takeover of Rover. In addition, he was CEO of Volkswagen since 2002 and in his first years he did nothing to adress the cost issues that were slowly eating away the company’s profitability. Only when the bad results were visible, he started a late restructuring and cost cutting program. Also important new models, like a successor to the Sharan minivan, have been endlessly postponed due partly to the Pischetsrieder’s inability to make tough decisions.

    I think given his track record at Audi Winterkorn is the right man for the job.

  • guyincognito

    I agree that VW has lost its way. I hate the styling of the new passat and jetta. If you want a fun affordable car with a great interior these days Mazda has it covered. But the quality is really where VW is dying. I had an Audi TT that had no major issues but many squeaks and rattles, a waxy substance that would accumulate on the rear fenders the dealer refused to acknowledge, etc. In fact that Ann Arbor Audi dealer tried to charge me $200/month more for the lease than a competing dealer and then wouldn’t give me a loaner car when I brought it in for service cuz I bought mine somewhere else. My sister had a 99 Beetle which rattled like crazy and went through a transmission, and now has a convertible that squeaks so bad with the top up it is completely unbearable. The dealer has had it several times and claims there is no noise. Not to mention the car is flexy, heavy, slow, and dangerously bad handling. Far cry from the 1994 GTI VR6 my Dad used to have. Other than the super long throw shifter that car was a blast!

  • CliffG

    VW is the great example of how fast the market moves these days. In 2001 they were on top of the world, their Euro design of Passat, et al, were attracting scores of former Honda and Toyota buyers, and the Golf 1.8T was a heck of a ride. And then, boom! The questionable build quality drove the former H/T owners away, and then instead of building that killer van, they built the Phaeton and Toureg. Yi. Now, their brilliant idea is to rename the Golf for the car that destroyed VW’s reputation in the late ’70s.

    It is obvious this company can build some fabulous cars, my 90k mileage Golf is still a great vehicle, so they don’t have Ford’s problem of a lack of good cars, they just lack a clue how to maintain their market. Different problems, same result.

  • Chris Parich
    sillyp

    I’ve been coming to this site for years but have never left a comment… until today. As a previous Jetta owner, I had to pipe up and share my experience. I leased a 2000 manual Jetta TDI for four years… with no problems except for a blown glow plug sensor that happened on the last day of warranty (5 minute fix at the dealership).

    Perhaps my little Jetta was an anomaly, but I’ve always been amused by the VW horror stories. I was not very friendly to my Jetta either, taking it camping in the Cascades and Montana, driving it over roads that would make my current Xterra fearful.

    Finally, VW interiors are, bar none, the best in the industry. Sit in a new VW, even if you hate the exterior, and you feel like you’re in an Audi (sadly, you’re almost paying that much now too). Just my two cents.

  • Nicholas Ross
    NickR

    Vee Dub’s once legendary reliability is now among the worst in the U.S. market.

    Is it ever. I am glad to see that some people have enjoyed some good fortune. I have several co-workers with VWs and in each case, they have decided that once it is off warranty it is gone.

    The electrical systems in particular seem to be dreadful and once the demons set in, they cannot be exorcised.

    And a big yes to the engine, at least in the standard version. I drove a regular Slug, er, Bug, and I’ll be damned if I have to drive something that requires flooring the accelerator every time you merge on a highway.

  • Sanman111

    You know, its a shame that vw is a shell of its former self in some ways. This is a company whose cars I really do enjoy, but reliability has been an issue since I could drive and with their higher prices it is just a bad idea. The sad part is that the MKV GTI would be my perfect next car in a year or two, but I just don’t know if the reliability is there. I will be a young professional in my mid-twenties and the civic si just makes me feel like I’m 17 again, the mini cooper is too small for everyday duty, and I fear the MS3 has too much torque (and torque steer) and will be hard to find. The GTI w/ DSG seems like the best overall daily driver. But with several friends who are ex- NB and jetta owners with window regulator problems, leaking sunroofs, oil burning up, leaks into the passenger footwell, etc. it is hard to imagine that they won’t have those problems. I’d rather compromise and get one of the other three than go through any of that.


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