Phaeton and Friends: VW Reveals Future Lineup Plans

Edward Niedermeyer
by Edward Niedermeyer

Volkswagen of America boss man Stefan Jacoby speaks with the Detroit News about VW’s US strategy going forward while admitting a few missteps. Jacoby acknowledges, for example, that the Passat “is too small, and it is almost knocking at the doors of the premium segment. That’s not where the volume is. What we need to do is improve our competitiveness in pricing.” And how does that admission jive with VW’s plan to bring the Phaeton back to the US? Keine ahnung. The DetN never asked.

Jacoby’s primary diagnosis of VW’s US market woes is that the brand is “too much positioned in the corners, in the niches of this big market.” Which means VW’s lamentable (from the enthusiast perspective) trend towards offering blandified US-specific models will only accelerate. Jacoby envisions a car lineup starting with a Polo (“or a car in the range of a Polo”), and moving up to a “New Midsize Sedan” in the Civic mold. From there?

We are looking at the truck segment as well. The Tiguan (compact SUV) has been very well received, but it’s imported out of Europe so we can’t realize the volumes that we could get out of that segment. So we are investigating a second product for Chattanooga, either a compact SUV or another SUV model. Above the midsize new sedan, we’ll have another product, like the Avalon for Toyota. That’s our strategy, to have a lineup ending with the Phaeton (luxury sedan). We will bring the Phaeton back to the market.

Does this mean the new Phaeton will be more of a tarted-up Passat than its ego-fueled predecessor? That actually might explain the “competitiveness in pricing” thing. Except that this so-called Phaeton may essentially replace the Passat. So is the plan to keep the price similar and simply offer more room and call it a Phaeton? The conundrum reveals an underlying problem with VW’s whole approach to the US market.

Lest the boys from Wolfsburg forget, Volkswagen built its reputation in the US by offering genuinely European products at prices well below the true premium European brands. For example, Rabbit sales have been hurt recently by poor fuel efficiency from its lumpen standard drivetrain, while Jetta is rebounding on the back of its diesel and wagon options. In short, VW’s appeal in the US is fundamentally a niche proposition. As such, VW’s forthcoming product line of (likely heavily homogenized) US-only options run the risk of sacrificing VW’s European image.

Specifically, what will the “New Midsize” and “In the Range of Polo” be called? VW (essentially) admitted the the shortcomings of condescending to the US market by recently announcing that the Rabbit name would die. But the “New Midsize” won’t be a Golf, nor will it likely boast such Euro-tech as VW’s “twincharger” engine. The “Range of Polo” will likely be a four door with a possible MPV variant. And as for crossovers like the Golf Plus or Touran? Jacoby would rather get the dumb Americans to shell out for a small SUV.

VW’s new $4 billion plant in Chattanooga represents a huge opportunity for VW to make inroads into the US market. But if VW uses its capacity to produce crude US-only products with little relation to its globally-renowned European products, it could well gain some volume but only at the expense of long-term brand equity. Having tried to “adapt” its European products to the US market (from Merkur through Contour), Ford seems to have learned that too much of their appeal is lost in translation. The Blue Oval is now bringing cars like Focus and Fiesta to the US with minimal homogenization. Why is VW still heading in the opposite direction?

Edward Niedermeyer
Edward Niedermeyer

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  • Psarhjinian Psarhjinian on Aug 18, 2009
    But if VW uses its capacity to produce crude US-only products with little relation to its globally-renowned European products, it could well gain some volume but only at the expense of long-term brand equity And that's sort of the point. VW's brand equity in North America really hasn't amounted to much. You can talk about the value of it among enthusiasts all you like, but if they're not making money, the "brand" is worthless and needs to be updated. There's a niche in North that VW could crack open: the semi-premium "normal" car. Mazda currently has this section of the market all to itself, what with Saab and Volvo's self destruction and Honda's total misfire on Acura. VW could play here if it did three things: * Rationalized the price of it's products. They're nice, but they're not as nice as VW is asking, and when they're stripped to affordability they're really not that pleasant. * Fix the quality and warranty performance issues---especially warranty. Getting your German car fixed is like getting a root canal without the courtesy of anaesthetic. The fault here lies with VWoA and VWAG: they've traditionally treated their American dealers' warranty claims as if they were handled by lepers, and as such you can hardly blame the dealers from passing the screwjob down to the customers * Develop products people want to buy. VW only begrudgingly acknowledges that perhaps North Americans don't want to buy what they have to sell, and they only admit it after they can rationalize selling the same product in Europe. There's nothing wrong with offering Europhile products, but you have to make a concession to North American tastes as well. This means that you cannot price the Passat to Audi levels and have it run premium fuel only, or that you can get away without a mid-size crossover. All this smacks of arrogance: that VWAG knows what's right and the North American market just needs to be led towards the light of their brilliance.** In Europe they've been sucessful largely because everyone else is just as bad or worse, because they benefitted from artificial barriers to entry (the diesel gap, which is now closed) and because they have incredible momentum. But Toyota and Hyundai are making inroads in Europe; VW needs to make hay in other markets to compete. In North America, this means making some changes, and yes, those changes will probably mean more Americanized products.*** The problem with what I'm hearing here is that all VW will do is produce cut-rate versions of it's current products (say, a generation or two behind, or significantly decontented) and assume all is well. This is how VW treats developing markets, and it will work right up to the point someone else makes something better for the same price. And at that point, Hyundai, Toyota or (eventually) Tata and the like will eat their lunch. Doing that in North America, which is already a mature market, just won't work. People will not buy an NMS Passat or Jetta, not when there are a dozen better cars for less. ** Rather like GM, actually. *** They don't need to sell Yukons, but they could offer a Passat with cloth seats and the 2.5L four, or a Jetta that could compete with the Civic in price, or a seven-seater that doesn't suck like the Routan.
  • Psarhjinian Psarhjinian on Aug 18, 2009
    I have owned seven VW’s, and now own a Honda. The Rabbit craps all over the Honda Jazz (Fit) for NVH, quality of interior bits and pieces, road noise, and interior fit and finish. We have a top of the line Jazz (VTI-s) which is only a couple of thousand dollars shy of the cheapest Golf available here. Wait, you're comparing the Rabbit/Golf with the Fit/Jazz, and even admitting that the Fit tops out several thousand below the Golf? And not even mentioning the car that it actually competes with (the Civic)? I think you're being a little disingenuous. The Polo GTI hatch looks good and is very perky with the twincharged engine. In fact, I think it will be my next car. It’ll be a shame if they don’t bring that car to the USA. It will not sell. Everyone who calls for these Euroboxes to be sold in the US needs to print the following out and post it above their monitor: North Americans do not buy diesels, sporty cars, or small premium cars in volume. They never have, and they never will. It's been tried, sometimes very well and certainly by people who won't half-ass it like VW would, and we've always preferred comfortable and reliable to sporty and "soulful". No matter how much enthusiasts wish it wasn't the case, it is. Even in Canada, where small cars do well, VW's nod to the small car market was to decontent the MkIV Jetta and Golf. You're dreaming if you think they'll try to send a high-buck Polo over here.
  • BeauCharles I had a 2010 Sportback GTS for 10 years. Most reliable car I ever own. Never once needed to use that super long warranty - nothing ever went wrong. Regular maintenance and tires was all I did. It's styling was great too. Even after all those years it looked better than many current models. Biggest gripe I had was the interior. Cheap (but durable) materials and no sound insulation to speak of. If Mitsubishi had addressed those items I'm sure it would have sold better.
  • Marty S I learned to drive on a Crosley. Also, I had a brand new 75 Buick Riviera and the doors were huge. Bent the inside edge of the hood when opening it while the passenger door was open. Pretty poor assembly quality.
  • 3-On-The-Tree Alan, I was an Apache pilot and after my second back surgery I was medically boarded off of flying status due to vibrations, climbing on and off aircraft, so I was given the choice of getting out or re-branching so I switched to Military Intel. Yes your right if you can’t perform your out doesn’t matter if your at 17 years. Dad always said your just a number, he was a retired command master chief 25 years.
  • ToolGuy "Note that those vehicles are in direct competition with models Rivian sells"• I predict that we are about to hear why this statement may not be exactly true
  • ToolGuy From the relevant Haynes Repair Manual:"Caution: The 4.6L models require a special tool to extract the water pump from the coolant crossover housing. This special tool is expensive and the removal procedure is difficult. Have the water pump replaced by a dealer service department or other qualified automotive repair facility if the tool is not available."One version of the tool is Lisle 14440; I paid $10.82 (less 5% discount, plus shipping).You can see why I never attempt my own maintenance or repairs. 😉