VW to Blitz U.S. With New Models
VW is planning to replace the Passat and Jetta with cheaper sedans "targeted at U.S. customers." At the Geneva Auto Show, VW Group CEO Martin Winterkorn said VeeDub's also contemplating small cars and perhaps a body-on-frame pickup for the American market. Automotive News [sub] reports the German automaker's pushing ahead with plans to build a factory in the States and have narrowed the site selection to North Carolina, South Carolina or Georgia. The plant will build a Passat replacement designed specifically for the U.S., with a new name and price around $20K. Winkerkorn also discussed other possibilities for the U.S. market: a small car based on the Polo, a family of small vehicles based on the up! concepts and a VW-built minivan to replace the Chrysler Town & Country clone Routan. Oh, and he wants to bring us a next-generation Phaeton, explaining "the Volkswagen brand needs a car like the Phaeton." What is it they say about those who don't learn from history?
If instead of an S-class-challenging luxo Phaeton, they introduced a bigger-than-Passat sedan akin to the Toyota Avalon, there might be some kind of niche for it. But if they still think they can make it as a luxury make, somebody needs to institute some mandatory drug testing in the home office. I think the problem VW has is that in Europe the brand has a lot more cachet than it does here. People still pay a premium for the Golf, even though they can usually get the same hardware in better-looking skin for less money with a SEAT or Skoda badge, and it reflects in higher resale values. That's certain NOT true in the States, but I don't know how much they realize it. VW has really cut its own throat with the reliability issue, and I'm not sure the home offices in Germany understand the problem. The American organization has, I'm told, gotten into the habit of denying warranty claims so that they can report lower warranty costs and meet their financial targets. If you're a German exec looking at the numbers from the States, the idea that there are issues may not be sinking in.
I'd like to comment but I've gotta give a lift to a co-worker whose Passat is in the shop...again.
VW does not take the American market seriously. Although it is the biggest car market and is (was) the most profitable, it is also the most competitive and VW does not know how to play it. 10 years ago when they launched great looking next cars across the line: New Beetle, A4 Golf & Jetta and B5 Passat they could have retained a good market share except VW could not follow up with market's demand for reliability/quality even after the models had been out for years! I can't believe how much money the passed on by coming to the game so late with their SUVs. The Tiguan is still not here!
Let me say a few things about VAG. I own two of their products (B5.5 Passat and V-6TT) and feel an need to somewhat defend them. 1. IMO, VAG knew they could not be profitable in NA by producing in Europe due to the dollar vs. euro rate. So, instead of giving VOA mini vans, CUV's, and small fuel efficient model they went upmarket with Phateon, 50K Touregs. Why because those models are profitable. In addtion, China market, Lambo, Audi, Bentley, and Bugatti have far greater profit margin than VOA. 2. Over-engineering is German engineering. Plain and simple. I have to remove three pieces just to get to the airbox to change the airfilter. I have to remove addtional hoses and clamps to get to the clamps for the airbox. All of these need to go back in place!! Is all this complexity necessary? No, in a Honda the airbox is just unfasten four clips and you have access to the airfilter. 3. This over-engineering leads to their unreliability problems. This encludes all German brands(Porsche, Audi, BMW, MB,etc..) However, in the high end brands people seemed to accept them as high performance maintenance issues. BTW, the 1.8T engine is a high performance engine but it is used in so many VW models owners treat it like a regular engine. Owners of 1.8T and 2.0T should not take their cars to Jiffy lube for oil changes! In conclusion, Mr. Jacoby is correct VW needs to produce in NA for NA/SA market. He is also correct in NA does not need high performance Euro features. However that is asking a German not be German!! So what is the answer? Hire Honda engineers to develop the next generation of VW's for NA!