By on December 13, 2013

Michael Horn

Volkswagen of America CEO and President Jonathan Browning has stepped down from his post, with Michael Horn  set to assume the role once held by Browning beginning New Year’s Day 2014.

Horn, a VW veteran, replaces Browning, who had been at VW since 2010. While VW is currently the third largest automaker in the world due to growing markets in China and Brazil, the United States remains a market that VW has been unable to crack. The main issue is the lack of a competitor made to take on the Ford Explorer and Toyota Highlander. VW’s current offerings in that space, like the Tiguan and Toureg, are ill-positioned and priced out of the majority of the U.S. SUV market.

On the car front, the Americanized Passat was supposed to be the key component in a strategy to help VW break out of its niche upon introduction 2011. Since then, the car has failed to crack the Top 20 of models sold in the U.S., with sales falling 2.1 percent this year in the face of tougher competition from American rivals.

Browning is said to be leaving for personal reasons, returning to his home in the United Kingdom.

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37 Comments on “Browning Out, Horn In As Head of VW of America...”

  • avatar

    “The main issue is the lack of a competitor made to take on the Ford Explorer and Toyota Highlander.”

    The “main issue” for me is the spotty reliability/durability of VWs, made worse by the lack of dealers (competition) to run to/away from. Of course, VW execs deny the problem, as a recent Jack Baruth article so simply displays.

    VW: Steal my money to fix your problems? No thanks.

    • 0 avatar

      The statistics say otherwise. VW quality as a brand is up, as per Consumer Reports and JD Powers.. VW is no longer at the bottom and has been slowly working their way up the charts, which is even more difficult given that nearly all car brands have been improving in quality in aggregate.

    • 0 avatar

      Agreed. I want to be a VW fanboy, but their journey must start with the following words:
      “Fuck volume, we’re going to beat Toyota on long-term quality. We want VW to be fun to drive AND fun to own!”

      Then they need to go do it.

      I loved driving my 2001 Jetta TDI, but owning it was a terrible and expensive experience. I love owning Toyotas, though, and I don’t hate driving them. But if I could have my cake and eat it to, I could become a fanboy – especially if that cake comes in diesel flavor!

  • avatar
    Felix Hoenikker

    I recently rented a 2012 Jetta from Hertz just to see how competitive it was with other cars in its class. Short answer is that you need to go back to the mid 90s to find something it could compete with. No cruise control, 2.slow engine coupled with an indifferent auto tranny is a recipe for falling of a sales cliff. Gas mileage was low 30s on the highway, while not terrible, is not near the 40 mpg that modern, compact 4 cyl cars deliver.
    In summary, it was so so. Now if that’s what the rest of the VW lineup is like, then I can see the reason for the slow sales.
    Couple that to the well deserved, horrible reputations of the VW dealer body, and it’s surprising that they sell as many cars in NA as they do.

    • 0 avatar

      Almost nobody – apart from rental companies – buys the 2.0. Which is good, because the base Jetta with that motor is the very definition of a penalty box.

      I currently drive a 2014 Jetta with the new 1.8T and a manual transmission and it is light years better than than what you drove. It still is a passionless transportation vessel, something VW has never been good at, but the engine is good, if not overly powerful (my previous car was a MAZDASPEED3 and 100 horsepower makes a huge difference) the transmission, despite being only 5 speeds, is a revelation for Volkswagen, at least in terms of having a precise shift linkage. They even came to their senses and returned to a proper independent rear suspension. It is a better car. A boring car, but a better car.

      • 0 avatar

        So what kind of fuel economy are you seeing with the 1.8TSI and the manual? So far there are very few 2014 gas Jettas on Fuelly to get a sense of real world economy.

        • 0 avatar

          Not sure yet. Because of technical difficulties with my wife’s car (two visits to the body shop in the last three months for major repairs) I haven’t really driven the car consistently enough to check the fuel economy.

      • 0 avatar

        Actually untrue. There is a huge demand for the 2.slow, because it’s the cheapest way for customers to get into a Jetta. A whole bunch of consumers don’t even know the details of their engine, so this becomes a non-issue to them. It’s more of an issue to us, the enthusiasts :) You’re right about the 1.8T: it’s worlds better!

  • avatar

    1) VW has no customer service. what they offer instead is TERRIBLE.
    2) VW has no SUV. The Tiguan is an overpriced little joke, the Toureg is an over priced big joke, both outshone by the Escape and Grand Cherokee, respectively.
    3) VW has no minivan. Of all the companies in the world, VW should be ruling this segment with a microbus revival. Instead they sneer at it and rebadge Chrysler minivans.
    4)VW has no real sedan. the Passat is a 1990 Camry fighter in a market of domestic and foreign offerings with ridiculously better reliability and sometimes 2x the horsepower. the CC is an antique.
    5) VW has no future. They have spent every last penny developing the MQB platform and they took so long doing it, that it’ll be outdated by the time it’s fully implemented. They’re already lagging by more than a full model year behind all the competition with new product releases in both the VW and Audi brands. MQB was a huge mistake dreamed up by overambitious engineers and embraced by the bean counters that will cost them dearly in the coming years.
    6) VW has no style. I’m sorry, but it’s true. All the cars lack brand definition. and the one thing that looks different (the CC) is dead on arrival. the chief designer even said that non-generic styling is dead. I think his job is likely dead soon, too. And dear god just look at the Audis. They should revisit the sedan naming convention from A3 to A4.3, A6 to A4.6 and A8 to A4.8. They all look the friggin same and have since Schreyer left to make Audi’s for Hyundai at half the price.

    No service, no SUV’s, no cars, no style, no future – dead brand.

    • 0 avatar

      I agree with some of that. VW really needed to implement at the very least a full 5 year, 60,000 mile warranty, starting around 2007. Maybe a 100K warranty on drive train items as well.

      Reason – this is a company that lost a lot of repeat business. No a Civic doesn’t come in a cute hatchback – but most of the service nightmares associated with a VW are unheard of. So, Honda, like Toyota maintains a faithful base of repeat buyers.

      At the bottom rung of the ladder, there are plenty of competitors in the US market that have up their game over the past 10 years. If only they all could offer hatches that are as well packaged as a Golf or Jetta wagon.

      The truly European models VW offers like the Toureg play to the BMW X5 crowd. The Toureg is that expensive. That is a small market in the US. GM Lambdas and Toyota Highlanders on the other hand play to a larger consumer base at the $35K to $40K level.

      You are right about the minivan. The problem is the Touran in Europe would be too small here and the Type 5 Transporter would need to sell for more than Mercedes Sprinter to be profitable. Once again the competition walks away with the prize. That Highlander platform can and is reworked into a Sienna people mover. The same holds true for the Pilot and Odyssey.

      • 0 avatar

        Interestingly, in the mid-to-late 90s, they were the ONLY manufacturer offering 100k on the powertrain. They didn’t tout it, it slowly died, and Hyundai picked up the torch. Followed by everyone else…

  • avatar

    All great comments, but the single biggest problem is lack of dealers (especially good ones).

    How on earth can you compete with Toyonda when you have a quarter of the dealer presences in most place, and maybe 1/10th the marketing awareness?

    They won almost every comparison test with their late 90s and early 2000s portfolio, but where were the sales? The cars hadn’t been around long enough to prove their (objectively true) reliability issues, so why weren’t they selling like hotcakes?

    VW has never really cared about North America, culturally, and their investment here — Chattanooga notwithstanding — has always been an afterthought. Bare minimum effort, bare minimum dealer network. So when the reliability issues turn the corner (which they have), where are the barkers on every street corner pushing these cars into the mainstream? I don’t pretend to understand the nuances of the US retail auto system, but this definitely isn’t working.

    VW, for most of the US, is still the brand you have to over-explain to friends and coworkers. “No, the Passat isn’t like the Civic, it’s like the Accord. You’re thinking of the Jetta. Oh, your mom has a Beetle with a flowerpot in the dashboard? That’s cool.” I’ve dealt with this for over 20 years.

    They need top-of-mind awareness here as the affordable, stylish, understated European brand. But they’re slowly throwing away that brand equity now in favor of trying to be Toyota, so what’s the remaining message? They may be the Toyota or Ford of Europe, but the US doesn’t see it that way. Definitely an uphill battle for the new guy.

    • 0 avatar

      As a former VW owner, I can assure you that the problems I had with that car were not related to lack of marketing.

      Or lack of a competitive CUV. Or lack of a minivan.

      Dealers aren’t that big of a problem. The prices for parts and labor on a complex modern car that turned out to be as reliable as my father’s 1978 VW minibus…. THAT was the problem.

      I can take an unreliable car if it’s cheap and serviceable, provided that the car has some other redeeming qualities. But my old Jetta had none of that going for it. It was just an expensive unreliable unrepairable piece of junk. Fun to drive when it ran, though.

      • 0 avatar

        “I can take an unreliable car if it’s cheap and serviceable, provided that the car has some other redeeming qualities. ”

        I’ve said much of this myself. You’re absolutely right that VW makes the cars (at least the older few generations) unreliable, expensive to fix, AND hard to DIY. Bad combo. I can’t speak for the current generation, which are allegedly better, and were the jist of my comments above. VW want to be dominant here, but I just don’t see them building out dealers and pushing the cars very hard at all.

        Anecdote: I replaced my MAF just last night (’98 Passat, daily driver) after the indy shop couldn’t diagnose it. They wanted to throw parts at it, several hundred dollars at a time — plug wires, plugs, valve cover gaskets, MAF, etc. I bought an MAF online (Siemens, not an ebay knockoff) for $90. Seems to have worked so far. Now I can refocus my attention on my upcoming third set of control arms. And the wife’s Passat, which has no heat, plus a burning oil smell in the cabin AGAIN after doing the valve cover gaskets just last winter. It never ends. If I were an average Joe driving a VW with little or no DIY skills, these cars would have been sold a LONG time ago.

        DIY serviceability and parts costs are VERY high on my list of next cars.

  • avatar

    My 2012 Passat has been extremely reliable and the dealer has provided terrific (free) service. It is, however, the worst car I have ever had. I am two years into a three year lease and I just cannot bear it anymore. Everything is great, except… how it drives. I just had it in for service and had a newer Passat as a loaner. I can only assume the newer ones have electric steering because it drove even worse than my car. It drives so much worse than the latest Camry, it’s not even funny.

    VW of America has been offering incredible lease deals on Passat and Jetta and that is the only reason they are where they are. Money on the hood. Tiguan and Golf are niche players, hardly noticed in the US. I don’t see them reaching their goal of 800k annual sales the way things are going.

  • avatar

    Someone, might be Reuters, said Browning couldn’t remember key telephone numbers of the big bosses back in Wolfsburg. The new man Horn is a VW lifer with all the correct phone numbers. No doubt they all tell him to sell more and reduce warranty costs – you must teach those Americans to appreciate VWs world class superior reliability and to stop buying subscriptions to Consumer Reports – Ford will help you in the latter project.

  • avatar

    I have a lot of history with the brand… First of all, VWoA’s new product onslaught was effective… for a while. The new Jetta, Passat, and to a lesser extent the Beetle all took off upon market intro, quickly surpassing sales volumes of their predecessors and nearing their target volumes. Unfortunately the competition quickly stepped up. Fusion, Mazda 6, new Accord, etc all offer compelling values.

    VW’s reliability history is a sore spot for some, and has never been a factor for others. And the majority of new car shoppers believe that the newer iterations of vehicles will far surpass the reliability of previous generations. If you are willing to consider the VW models at all, reliability isn’t a deal breaker. Another comment is correct that reliability has been steadily improving by all industry metrics.

    But executive turnover is rampant at the company. It’s not just at the CEO level, but nearly every single executive manager in the company. This leaves no clear direction for VWoA within the US market, while Germany continues to try to dictate much of the offerings with only the faintest understanding of what American’s want to buy.

    The problem with VWoA isn’t a lack of awareness. The brand’s awareness in the eyes of consumers is on par with Ford and it’s main rivals, but there is a massive drop off in conversion, ie generating shoppers.

    Everybody knows VW, but it’s a different thing to everyone. Their brand identity is constantly changing. The air cooled crowd thinks VW means simple and cheap transportation. The first generation water cooled crowd thought the brand meant cheap and economical with a nod to performance. Later, it was all about european driving dynamics and sportiness with an air of superior material quality. Recently the push is back to economical and cheap, with much less of a focus on performance. The result is that no one knows what VW stands for.

    A brand that tries to be all things to all people is never going to stand out for anything.

    • 0 avatar

      In Europe, a VW won’t leave you stranded as often as a Renault or Peugeot or Fiat, and costs about the same. So not until the Japanese (unlikely) and Koreans (more likely) start eating VW’s lunch will there be any incentive to improve quality (not holding my breath).
      In US, VW is more or less an alternative personal fashion (‘lifestyle’) brand alongside Mini, Subaru, Mazda, Range Rover…

  • avatar

    That is a very happy looking German.

    • 0 avatar

      He just got the job, and probably sees it as a giant step on the way up. After he surveys customers and dealers, and tries to give feedback to Wolfsburg, there may be a change of expression.

  • avatar

    Here’s my summary of how they must think in Wolfsburg:

    “Americans are too stupid to appreciate our great cars. So let’s turn the Jetta into a Corolla with artificial German flavor, do the same for the Passat, and build a US plant to look like we care. Then we shove the [email protected]#% at the dealers. Then we push our US executives to deliver 800K units. Then we call it a day. Whomever can’t do it isn’t up to the job. End of story. Any questions?”

  • avatar

    The Germans do indeed think that this is a problem of perception, and that American consumers just can’t recognize good quality when they see it.

    From Speigel:

    “But American customers have their own DNA, and a different understanding of quality. That much became evident to VW executives when a supplier recently paid a visit to the Volkswagen plant in his Toyota.

    The white of the Toyota’s bumper was different than the white of its bodywork. Such a car would never be allowed out of the VW factory. When Volkswagen employees brought this to the attention of the supplier, he just said, “Oh, that — I hadn’t even noticed it.”

    More important than paint or the width of a gap is that the car has the latest navigation system and that the cruise control is situated where the driver is accustomed to having it from their previous car.”

    • 0 avatar

      The Spiegel article is very interesting. Amazing how such a large company with such vast resources can be so clueless about the U.S. market. The average buyer wants comfort and bells and whistles, while they probably won’t really notice panel gap differences or slight colour differences.

      And it’s amazing that VW will sell about 40000 less vehicles this year while pretty much all the other brands have had huge sales increases.

    • 0 avatar

      Ironic re-write of history that it was Toyota/Honda that showed how tight panel gap could be back in the 80’s, but VW claims it’s in their DNA?!
      Then pick on some random Toyota’s mismatched paintjob to make a point about paint? It’s not paint that’s the problem…
      “Jim Ellis, a VW dealer in Atlanta, says his customers want a new model every two years.” Let’s hear the complete quote: “Because the 2 year old VW either feels worn out or has begun having problems.”
      I can see how VW doesn’t get it. Anyway, the US market is shrinking, so it’s a great time to just leave it to Audi…

    • 0 avatar
      George B

      Thanks for the link to the Speigel article. Interesting to read their perspective. I’ve driven many different Volkswagens and put them in a “maybe” category. Not bad cars, but not so uniquely good that I could overlook their reputation for relatively high maintenance and repair costs.

    • 0 avatar

      Watch out for the English language Spiegel online. If you can read German, you’ll see significant differences in the two editions. Spiegel tends to tone down the anti-American bias endemic in the German press in its English editions.

  • avatar

    More important than the latest navigation system is a car that I can start, close the doors, clear away the snow, and NOT lock the goddamn doors while my house key, car key, and office keys are inside a running car that I can’t get into. Any person that owns a German car, off warranty, needs their head examined.

    • 0 avatar

      I do not get the complaints of US customers on realibility of the Germans. Here in Europe you can see a Passat or on Audi 6 with 150-200k miles running without big problems. Actually it is difficult to find a Passat or an Audi in a used cars shop that has less than 100k miles. Most of them are company cars and they make 30-50k miles/year. Are there differences in maintenance or is the reason something else?

      • 0 avatar

        Toyota and Honda were innovators in improving reliability. Americans have become quite familiar with this and have since come to expect cars that operate with few problems, while the Europeans have not.

        Europeans also drive less than Americans on the whole. That lowers the bar further still for the demands of European car owners, as problems will tend to be delayed.

        The company car market in Europe aids with this. Most luxury car drivers are lessees, not owners; reliability is less important if you’re assured of getting a new replacement car every few years.

        Routine maintenance will not fix inherently flawed designs or engineering. If components fail prematurely during the early years of ownership, it’s probably because there was something wrong with the component, not with the driver.

        • 0 avatar
          George B

          Toyota and Honda do make design errors, but they do a pretty good job of getting the problems fixed under warranty, sometimes extending the warranty period. Customers can overlook reliability problems if the repair was free with a free loaner car. Volkswagen should work harder at improving the warranty repair experience.

          Customer expectations also affect reliability. If you expect keep a car for a long time, you make a little extra effort to maintain it. However, if you lease it for 3 years you’re less likely to spend time on maintenance and fixing minor problems before they become major problems.

          I’ve noticed large numbers of older Honda Civics and Accords still in use in my neighborhood. Lots of older pickup trucks too. Their life seems to be extended by DIY repair. Volkswagen could probably improve their reputation by making DIY repair easier.

          • 0 avatar

            Thanks, George B. Those are the kind of suggestions Horn needs to tackle the job. Unfortunately, he’s got an uphill battle with Headquarters pressuring VWoA to pressure dealers on keeping warranty expenses down, and he’ll never get the German engineers to admit the running gear of their models isn’t engineered for American roads and driving habits.

            There was a comment here way back when, about the weak AC in BMWs that the engineers thought were just fine, until the execs made a trip to Phoenix and roasted in 110 degree weather with the AC on full blast. Just about the only way to get German engineers to see what’s needed is to bring them to America and put them in 2 year old Passats and make them drive them for about 500 miles a day, preferably in hot weather. Then maybe they’ll understand the lack of robustness in their engineering, but I wouldn’t hold my breath.

  • avatar

    Half of Americans want cars that don’t break…The other half – Lease.
    Where does that leave VW? Especially when their Tiguan and Tuareg arn’t competitive. WTF does some MBA marketing twit (bumbling, emotionally-crippled, self-important/arrogant, amoral, parasitic, brat) change accomplish? The Internet is making life more difficult for the sales and marketing “Branding” sociopaths. Maybe VW can raise Edward Bernays from the dead. I doubt that would help.

  • avatar

    I will bet you that at this very moment VW minions are reading this article and all the comments and, instead of treating it as the most valuable free research they could possibly have, are readying their explanations for the new boss tomorrow morning of why everything they have done is right and how misinformed the stupid American customers are and how it’s the fault of the PR people for letting blogs like this get out of control.

    I’ve spent plenty of seat time in new Jettas and Passats because there are far worse penalty boxes on the National Emerald Aisle, and with just a few thousand miles, what could really go wrong? They’re all right, and they even seem like decent value just comparing size, features, and price with their key competitors.

    But that’s my point. They are JUST ALL RIGHT. They are boring. They both already look about ten years old, and they sure aren’t enjoyable to drive like VWs used to be.

    My view — in addition to agreeing with just about every post above — is that customers looking for a mid-sized, high value, ultra conservative sedan, who would be happy with a car as dull as a new Jetta or Passat, are NEVER going to take a chance on a car with the quite deservedly bad quality reputation of VW and its dealers. The customer to whom a Passat appeals is not somebody who enjoys driving … it is somebody who doesn’t want to take a chance on her or his car giving any grief … a Toyonissonda is the only sensible choice.

    VW thinks it can change this by firing one boss and appointing another who will no doubt be equally ineffective at fixing what is really wrong. Good luck to him. I’m sure firing the ad agency (again) will be next.

  • avatar

    I believe management style drives organizations, which is why Rick Wagoner was such a disaster for GM for a decade or more… When you’ve got Ferdinand “The world needs a $100,000 VW Phaeton” Piech running things he’ll dictate how the world turns and you as a mid level flunky will try to make it spin his way.

    I was honestly surprised they even bothered building Chattenoga they’re so clueless on the US market… the fact that they can’t come up with a good product plan now that they have the factory is no surprise either.

    Watch for more defections or firings from the US management ranks… the beatings will continue until morale improves!!!

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