The Definition Of Insanity: Selling A Premium Volkswagen And Expecting Different Results

Derek Kreindler
by Derek Kreindler

If the definition of insanity is doing the same thing over and over again while expecting different results, then Volkswagen has gone certifiably bonkers.

Volkswagens unrelenting determination to have consumers accept the notion of a premium priced Volkswagen has led them down the path of insanity before: first, the Phaeton, then their planned, cut-price Phaeton for America, which is apparently on track despite Phaeton 1.0’s spectacular failure.

Now, VW is preparing a China-specific premium sedan based on the Audi A6L. Apparently not contend with its exponentially higher volumes, VW wants Audi’s profit margins too. And the best way to accomplish that is, apparently, by making an expensive sedan priced perilously close to Audi, with a badge that, even in China, will be difficult for premium consumers to swallow.

Apparently, a crackdown on luxury car spending by government officials has created a market for upscale vehicles without premium badges, but it seems difficult to understand how this niche will sustain planned volumes of 50,000 units annually, even in the booming Chinese market.

Derek Kreindler
Derek Kreindler

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  • Toad Toad on Sep 22, 2014

    I actually feel bad for the VW dealers over the Phaeton. They know that Americans buying cars at this price point that want a VAG product will buy Audis, which are usually about 200 feet from the VW dealer. VW dealers are going to have to train salespeople, F&I staff, service writers, parts guys, and service techs to sell, support, and service a car that nobody is going to buy. The cost of training, support materials, and the required parts inventory gets real expensive before the first car is sold. Normally I don't feel really sorry for car dealers, but this has to hurt.

  • Robbie Robbie on Sep 22, 2014

    Where have you gone, Jackie Bah Bah Ruth A website turns its lonely eyes to you

  • Cabriolet Cabriolet on Sep 22, 2014

    Did any of you read the original article. Guess not! This Phaeton will only be sold in China. Not the USA. I understand all of you can not stand to read about VW but please give it a break. I have had a number of VW's since 1980 and have enjoyed each and everyone. Thinking back if the Toyota and Honda i brought in those years was any better i might have stuck with one of them. If VW's were as bad as everyone claims they are they would be out of business in Europe and China. Cars are sold today only for the lowest price. Most buyers when buying a car today are only interested in the lowest monthly payment. Give them a loan for 96 months and they will kiss your feet.

  • Signal11 Signal11 on Sep 23, 2014

    What a ridiculous article from someone who clearly has no idea how brands are perceived in different markets. "... with a badge that, even in China, will be difficult for premium consumers ..." You have no idea what you're talking about. VW is perceived as a premium, European brand in China. In a lot of middle class circles, it's even perceived more stylish and fashionable than the BMW, Audi and Merc, the latter two in particular associated with the Party and the military - VW is the brand of the young entrepreneur. What do you call a company that's doing in a different market with different perceptions at a different time with a different approach? Of right, insanity. Because clearly, China is America.

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    • Spreadsheet monkey Spreadsheet monkey on Sep 23, 2014

      @Jimal Indeed. And nobody (apart from Ann Coulter) makes wild predictions that soccer is "insane" or a "spectacular failure".