What is vastly more important is the dramatic exchange rate, as a few others here have pointed out. the current exchange is approximately 1.3 $US per Euro. This means that VW manages to provide competitive cars in the USA despite a 30% pricing disadvantage. That is no small feat, and all the while VW seems to have solved past quality issues by closing the crappy production facilities in Brazil and Mexico and instead moving new model production to Wolfsburg, Brussels, and Portugal. Based on this, VW of America is not in a crisis; the company and products are better than ever.

Sure, investors whine because profits are eaten by currency exchange rates. But when you and I shop for a car, would we eliminate a car model because its manufacturer didn’t report huge profits last year?

Note that the current Car & Driver “top 10″ car list has a VW on it, but not a single Toyota. Meanwhile several new models (Passat, Toureg, Tiguan, possibly the Scirocco) are on the way, as are about half a dozen new Audi models. Hmmm… maybe VW isn’t adrift after all. It just could use a little help from the foreign currency exchange desk…

I’ve been told over and over the VAG has a US presence for no other reason than they can. They still make enough cash to drop ton of it here.

So how does VW make a profit on a US Rabbit ?

Given that they may not, I was going to mention the cheaper brands – Skoda and SEAT.

But then I did some digging on VWs sales performance. The line “the germans don’t seem to care” kind of stuck with me.

And my conclusion is that they may just not, and perhaps they shouldn’t.

According to Market Watch

VW sales grew worldwide by over 9%.

Key figures include :

A rise of 5.9% in the US to 330,000 units – that is all VW products so includes Audi as well, although I find it hard to believe that VW is shrinking and Audi is more than making up the difference to account for the growth, so the new models seem to have reversed the 4 year downward trend described.

A rise of 5.8% in Europe to 3.11 million units, or around 10 times the number sold in the US. That also includes Skoda and SEAT as well as Audi. These are also sales in Euros so there are no currency fluctuations to worry about. Skoda and SEAT are the big gainers here – Skoda just marked an annual output of 500,000 units for the first time ever.

A rise of 24% in China to 711,000 units, or twice as many as in the US. Unlike the US and Europe this is a growing and not yet mature market and if you were going to invest for growth it would be here and VW has been here since the 80s.

South America and South Africa took 638,000 units, growth of 15%. Arguably these are lower priced vehicles that may be sold in the US or Europe but they are produced locally and not by expensive German workers on a 4-day week.

The worldwide total is around 5.73 million vehicles, so 330,000 sold in the US is actually only 5.7% of the total. Europe is much higher and China will be 3-4 times the US in terms of numbers if the growth there continues in 2007-8.

So should VW even be bothered about sales in the US ?

That is a difficult one to answer and every reason to say yes has a good two or three to say no. In the same article they describe the US market as “competitive” and that discounts will be around for some time.

So for me it would be China all the way.

I wonder what cars people are buying if they aren’t buying VWs? I assume some migrate to Civics and other cars, but the real possible winner in VW’s decline is actually Saturn with their new Euro-like cars. I am guessing many people will cross shop Golfs/Rabbits and the “new” Astra when it arrives.

It may sound politically incorrect, but if you meet some of them, you can feel it. A lot of them simply don’t like anything manufactured by people whose skins are not as fair as theirs.

You are so right. Riding in a 1950’s Chevrolet or any current American car really make you realise how good minorities are treated in the US….

I don’t belive for example that WASPs (or white swedish protestant in my case) are more open minded in the US than in Europe.

I would agree that minorities are better integrated in the workforce in the US AND the UK than in Sweden or Germany – but I find that is more a cause of labour regulation. In the US you can hire somebody and test them out, give them a chance. In Sweden if you hire somebody, you’re stuck with them.

This is a good example of how a “european” car company” doesn’t translate well for us “americans.”

Europe does have a different auto culture there. But mostly because Europeans are a bit more complexion focused (trying to find a non-offending version of “racist”). It may sound politically incorrect, but if you meet some of them, you can feel it. A lot of them simply don’t like anything manufactured by people whose skins are not as fair as theirs.

Also, never forget that VWs command a premium price even in Europe and the Euro-Dollar excahnge rate isn’t helping US import prices.

As I mentioned before, the exchange rate is a non-factor. Over the past 40 years, the Japanese Yen rose more.

Based on my many years of experience and conversations with VW mechanics and drivers alike, the 2.0L 8-valve engine from 1999-2005 was the most problematic – especially with oil consumption.

The 1993 through early 1995 engines can take a lot more abuse/neglect and still keep running. My 1997 Jetta just turned 200,000 miles and doesn’t burn a drop of oil….

The only thing I trust the dealer staff to do these days is change the oil. For the bigger maintenance items, timing belt, clutch etc., I take my cars to a private VW mechanic I’ve been going to for the past 15 years…

Stereotypically, driving for europeans is all about “you in the car”, which is why there is such a premium on VW interiors, driving dynamics and refinement. They want, ne, HAVE to feel as though the car was built for their ass alone, it is their god-given right to have a car that answers all their primal instincts and to hell with the cost.

Americans (term used loosly) on the other hard are more about “how you feel owning the car”. Price is still king here, but more than that is the need for what you are paying for be tangable. To most American drivers driving feel and interior quality are not quantifiable assets so they don’t want to pay an unholy premium over something they really don’t think about. Do moms getting groceries care all that much that their Passat is well balanced, grippy and communicative? Not likely.

Also, never forget that VWs command a premium price even in Europe and the Euro-Dollar excahnge rate isn’t helping US import prices.

I’ve owned two VW’s over the years, a third-hand 1990 Golf and now a MK5 GTI and I’ve been happily immune from quzlity issues. My first VW did expire in smoke afer a few years and 160K milkes, but I would blame myself for never changing the oil and basically treating it like crap.

However, when I bought my GTI I was talking to some people on the dealer staff and was told about the horriffic train wreck that is the old 2.0L 8-valve engine used from 1993 to 2005/6 and how “Volkwagen will be paying or warranty claims for those engines for another 5 years and the new 2.5 Litre I5 will be the shit on the cake for the next 10.”

I think the 1.8T is a great engine (withholding the reports of “sludge”) and that the new 2.0TFSI will be even better, but it seems that whenever VWoA does an engine just for the NA market they get it completely wrong — first the 2.0L and now that lumpen and whiney 2.5L that has less power for it’s size than a slot car.

The dealers have also been a problem to me in that they seem understaffed and not cogent to their customers. I took my newborn GTI in for some adjustments and it would take them 5 or 6 hours. Fine. But did they offer me a courtesy car or shuttle service? No. If I had spent the same money on an Audi A4 they would have given me both, and that is just shameful to VW.

For my money, I think the “problem” with VW in America is that they are dumbing-down their offerings for us and then kying about it. They don’t give is the very very good 1.6 and 2.0 litre FSI engines from the european Golf/Jetta because they don’t think we want or can handle engines that take revving; they won’t give us the now-dead Lupo or Polo because they think we can’t accept small cars and ignore the sucess of the New Mini; they wait 2 years to give us the 5th gen golf/jetta because.. I have no idea why, but they were short-sighted.

I’ve heard that is all because VAG is afraid that VW market share will eat into Audi Market share but that’s not a good reason if true.

Early reports are the latest gen VWs have good reliability. The fun factor, solid feel, safety and interior quality is a step above the beloved japanese.

You know, that is not possible. Reliability means “works for a long time.” The latest gen models have been out of factories for only a short period of time because of the “latest” word. Perphaps you mean “initial quality”? But anyway, I believe most people won’t consider VW to be reliable, until it can be good for a full cycle of 8 years.

As I said, the direct competitor to VW is Subaru. AWD is standard on every Subaru, but only on a very limited number of VWs. And yes, Subaru beats VW in terms of safty, at least according to IIHS.

Although reliability is not the only concern, people do expect at least average reliability (don’t have to be Lexus-reliable) when making the decision. And there are safe, fun and reliable cars out there to choose from. Besides Subaru, Mazda is also very competitive. I will buy a Mazda 3 over a VW Rabbit in a heartbeat. (And yeah, I do believe the total ownership cost of the latter would be higher.)

there’s mediocre reliability, and then there’s the good-god-did-a-drunk-five-year-old-assemble-this reliability of my 2003 Passat. I never got much from the “hey my car sucks” “hey my car has been fine” posts in these forums, but for the love of god that thing was unreliable… and…

* My friend who drives a 2002GTI has been in the shop 4 times… this year alone.
* My passat sunroof rattled right off the lot. I called the woman who sold it to me to complain and she said, “yeah, um… welcome to owning a volkswagon… they all do that.” I drove in a friends, and whoa… it did.

Point is, the thing has to at least have reliability that doesn’t make you swear off the whole brand (see problem with GM, Ford etc.). I’ll forgive a few messups, but crap cars over and over, and 3 cars in top 10 LEAST reliable cars by consumer reports has turned me off forever.

What you have to remember is that VW is the GM of Europe. They are just another very large brute that stumbles over themselves.

Personally, I’ve driven several VW’s over the years and never had a problem with any of them. There have been countless problems with other makes that myself/family have driven (Volvo…you and your S80 can go straight to hell), but that is our own experience. My dad is convinced that the Phaeton is the best car he’s ever driven. Has sworn off his affection for MB S class forever, and rather dissapointed that they don’t have the FWD V6 diesel Phaeton here in the states.

I think that VW’s are quirky, and fun to drive. They are kind of like the really cute sorostitutes you see tooking around campus in slushbox Jettas. They are fun to ride, but give you one hell of a time if you neglect them. Maintain them, and they will drive and feel better after 8 years than most new cars feel after 8 weeks.

Early reports are the latest gen VWs have good reliability. The fun factor, solid feel, safety and interior quality is a step above the beloved japanese.

Look at a 15k rabbit. That car is an utter steal of a deal. Who wouldn’t rather drive a $15k rabbit over a dull corollaesque mobile.

GTI/GLI are absolutely tops in their class. If the masses and consumer reports lovers had their way, all companies would have absolutely no sportiness like toyota.

Ouch! My two favorite makes mentioned in one sentence?

VW completely owns the interior comfort, quality, and ergonomics over Subaru. I would also tip them the “fun factor” with the execption of the WRX….but I still prefer the low-end grunt and refinement of the R32 to the turbo 4 of the Rex. Subie gets the nod for better value, though many are quickly creeping up into the $30s just like vee-dub. Subie also wins on cost of ownership and better dealerships, in general.

These are just my opinions, though…

Also, don’t blame VW’s failure on the stronger Euro. 40 years ago, VW was dominating US import car business and Toyota just got started. Over the 40 year span, the Japanese Yen has risen far more than the German Mark/Euro. And yet VW became a non-factor for Toyota.

The mental linkage between “German” and quality has been broken by VW and the other german makers.

VW US has set themselves up to go the way of Peugot, Citroen, Fiat and the rest of the mid-market European cars as they will be forced to abandon the US market due to an inability to compete. Maybe the Japanese managers and engineers are simply smarter than their European and American counterparts ?????

I agree with most of the other’s opinions on VW’s nosedive. Also, consider their purchase of Lambo., Bentley, and Bugatti as part of their downward fall.
Those brands are just taking more engineers, capital, and personnel away from VW/Audi. If it wasn’t for Audi sales VW would be in worse shape than it is now.

The latest VW/Audi engineering gems, DSG and FSI didn’t even come from those brands it came from VW/Audi racing program!

VW should have built the Mircobus a few years ago it would have been an oxymoron-a cool minivan and would have sold.

For VW sake I hope Porsche takes controlling interest and gets VW back on track on making the “peoples car” they were famous for so long.
It seems every German car company with the exception of Porsche has made some huge errors in purchasing of foreign automotive companies.
I blame that infamous German ego.

I would love a 5-door GTI, but my experience with my old 2002 Audi S4 left a very bad taste in my mouth. The dealership experience was absolutely wonderful, but my car was in the shop for 24 days in a 6 month period. Every single morning, I asked, “What’s going to go wrong today….”

The years between 1998 and 2002 were truly dark ones indeed for the VW Group in terms of reliability…

Still, I fondly remember my family’s old 1979 Rabbit Diesel (drove from Atlanta, GA to Juneau, AK in that car – 2 adults and 2 children) and 1983 Vanagon. I lusted after the first gen Scirocco and Rabbit GTIs.

I second that motion!

After the A2 and A3 models, I moved on to a brand new 2003 Jetta TDI, and got a used 2000 Jetta TDI for the wife. My 2003 Jetta has been in to the dealer once for an alignment. I’ve done all the maintenance on it so far, which has only been oil changes, fuel/air filter changes, rear brakes, and tires in 95000 miles. There are a fuel weird issues, like how I have to hit the centre console to make the HVAC lights come on sometimes, and how the visor light comes on randomly when the visor is by the driver’s side window. But it’s still extremely fun to drive. I beat it around like it owes me money on a daily basis, and it hasn’t complained yet. My wife’s 2000 Jetta has been similar. Routine maintenance in general, but she does have a persistent check engine light which is due to a faulty glow plug harness. I’ll fix it when I fix it, not a big priority.

In my opinion, VWs are not meant for people that don’t know anything about cars. I used to recommend to a friend to check out a VW TDI, but I stopped doing that. He drives a Corolla and seems to love his Toyota, and he doesn’t know anything about cars. So I decided that a VW would not be a good match for him. Even if he bought one and took it to a dealer, he’d likely be bent over every visit for some outrageous amount. As for the current models, the Golf and the Passat appeal to me, but nothing else. And none of the models have a TDI option right now, so what’s a diesel lover to do? You either wait for 2008 or go buy an E320 for $50000. VW never makes things easy. They seem to want to be in North America, but rarely offer cars that people beg for. Where were all the 4Motion 5 speed TDIs? Oh yeah, they didn’t think we needed them. Why did it take so long to bring over a Jetta wagon, and why did they drop the wagon option for the A5 platform?

It often seems like like everyone in VW management is on glue with the sheer stupidity of how they run their operations over here. I’m glad I have my two Jettas, as I plan to keep them until they no longer run. Otherwise, I’ll have to start looking for used well maintained VWs since VW doesn’t want to sell anything new that I would really want. I do like my VWs, but VW just doesn’t seem to like selling cars or take care of their customers.

I’ll take an R32 myself…

All Japanese cars are no fun to drive? Ever driven a Miata? I submit it is more fun to drive than anything in VW’s lineup, ever.

The A8 existed before the Pheaton was developed, which begs the question of why they did the Pheaton in the first place. Its like Chevy building a car for the same market segment (and ultimately compete against) the Cadillac STS.

There are some Jettas of that model year (and earlier) that came with an auxilliary air pump (for emissions). The air pump was removed for the late 1997 through 1999 model years. My Trek was manufactured in late 1997, so it doesn’t have the air pump.