As Isaac Newton didn’t say, to go up, Volkswagen had to go down.
U.S. sales of Volkswagen brand vehicles declined 18% in October 2013, year-over-year, a 6182-unit decline in a market which expanded by 114,000 units, or 10%. Looking back, October 2013 was Volkswagen’s seventh consecutive month of decline, a streak which would continue all the way through the third quarter of 2014.
Yet this sharp decline last year enabled Volkswagen of America to announce, “increased traffic in our showrooms,” and an 8% increase in total volume for October 2014. Increases, yes, compared with a period of dramatic decrease.
This is nothing new in the world of auto sales reporting. We examine year-over-year sales comparisons for seasonal purposes – month-over-month results are skewed by the fact that Americans buy far more cars in, for instance, March than in February. And in this case, year-over-year refers to a comparison between 2014 and 2013. Volkswagen is not lying or deceiving or following anything but standard industry practice by celebrating their increased showroom traffic and increased total sales as showroom traffic and total sales as October 2014 compares with October 2013.
But after a streak of some 18 months (a streak we discussed on TTAC last month, in a September Subaru-related chart, and in an August SUV article) we feel duty-bound to point out that, while the streak has ended, we did not just witness a Volkswagen USA burst.
With 30,313 October sales in 2014, Volkswagen’s volume last month was down 12% compared with October 2012. The brand’s market share fell from 3.14% in October 2012 to 2.33% in October 2013 and then rose only slightly to 2.37% in October 2014.
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Volkswagen
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October 2014
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October 2013
|
October 2012
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Jetta
|
14,607 | 11,710 | 13,476 |
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Passat
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6,513 | 7,258 | 8,355 |
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Golf
|
4,076 | 2,249 | 2,914 |
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Beetle
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1,941 | 2,555 | 2,439 |
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Tiguan
|
1,803 | 2,153 | 2,752 |
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CC
|
593 | 1,289 | 2,238 |
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Touareg
|
578 | 549 | 965 |
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Eos
|
202 | 261 | 331 |
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Routan
|
— | 105 | 841 |
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—
|
— | — | — |
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Total
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30,313 | 28,129 | 34,311 |
These figures are still disappointing for the brand, particularly when one takes into account the arrival of a new Golf. Total Golf family sales were up 81% year-over-year to 4076 units, a 40% increase compared with October 2012. But the Golf isn’t the major Volkswagen player in America that it is elsewhere, accounting for just 13% of the brand’s volume last month.
The Passat bears much of the responsibility for the low totals in each of the last two Octobers. 8355 were sold in October 2012, but Passat volume fell 13% to 7258 in October 2013 and then dropped to just 6513 units in October 2014. This marked the third occasion this year in which fewer than 7000 Passats were sold in a single month and the third-lowest Passat month since 2012 began.
The Jetta sedan is once again a savior for Volkswagen in the United States. 11,253 Jetta sedans were sold in October 2012, but sales slid 10% to 10,161 in October 2013. 13,372 were sold in October 2014.
Excluding the Jetta sedan and the Golf family from the equation, Volkswagen USA sales slid 18% in October 2014. That figure is relevant, odd as it may sound, as it reveals the decreasing appeal of Volkswagen’s other models. Beetle sales slid 24% in October 2014, the disappearing Eos was down 23%, Passat sales fell 10%, CC sales fell 54%, Tiguan volume was down 16%. Touareg volume was up 5%, or 29 units.
Moreover, it reveals a great deal about the brand’s current circumstances. October 2014 Volkswagen USA volume wasn’t particularly healthy; it just wasn’t as unhealthy as it was at this time a year ago.
But the streak has ended.
Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures.
I believe the technical term is “dead cat bounce”
Regression to the mean?
It’s a market dominated by crossovers. Porsche and Audi got the memo; VW didn’t.
VW makes most of it’s sedan profits from Audi(which is booming globally) and Porsche( making a lot as well)
VW USA just doesn’t want it.
I bought a VW at a dealership two hours away, to avoid the crazy dealership close to my home. A month ago, the close by dealership *bought* the two hours away one. Surely soon, they too will recommend “higher octane fuel” for every problem with your car; soon they too will be unreachable by phone and email.
I felt the same. I went to Dallas to buy my VW this past summer (I’m in Oklahoma City). Shame you have to go through such crappy service. My local dealerships are at least good at that. Maybe you should slaughter them on a couple of surveys or call customer care and report them—because “higher-octane fuel” is *not* an acceptable answer—and see what happens.
Which VW did you buy?
I live in OKC but bought my GTI in Fort Worth mostly to avoid Cable VW. Two minutes after stepping foot in the dealership, the prick salesman starting insulting my a trade-in, a mint condition 2005 Civic Si. He starting expounding on the wonderful steel VW’s were made from and I retorted then why don’t they learn to make reliable electrics and durable plastics next. This is an example of why people refuse to buy VW’s. Most of the VW sales/service departments are managed by total d-bags.
Beating a dead horse here, but the problem boils down to:
1. VW zigged when the rest of the market zagged: they decontented when everyone else *added* content;
2. Historical reliability issues haunt and plague them, even though they’ve improved in recent years;
3. The MQB changeover has left VW in a lurch with stale product;
4. The competition has gotten *really* good;
5. Did I mention the competition?
6. They’ve completely missed the CUV shift in the US market and don’t have a competitive SUV during this ‘how soon we forget high gasoline prices’ resurgence.
As I’ve said before – they’re putting things together to fix the product mix, localize production, etc. They’ve just completely missed the golden opportunity of the market recovery and replacement cycle that is probably getting close to its peak. Sometimes, timing is everything.
That’s a good list. I would add a seventh point: the quirkiness of the brand message does not match their aspirations for volume.
VW’s famous Ogilvy ad campaign for the Beetle (Think Small, Lemon, etc.) established VW in the US as a niche player. VW has never escaped this image, and it sells volumes that one would expect from a niche player.
Yeah, PCH, I don’t dispute that, but the majority of car buyers today weren’t around during the day of the Beetle.
Speaking of branding, and I know we’ve discussed this before, my take on it is that VW completely lost the connection between product and reality; Between messaging and product. There was a 10 year stretch between the mid-late 90s and early ‘naughts where Volkswagen of America nailed their audience and, quality issues aside, had a decent and competitive product lineup to match. The “Blue Moon” cabrio advertisements, the funky Jetta commercials, etc. all fit the brand, the image and the customers they were trying to reach.
Today? Ugh. Painful to watch. Subaru has completely co-opted the lifestyle advertising that Volkswagen owned. I’ve said this before: my wife sees Subaru commercials and they just click with her. VW isn’t even a blip on the radar. The more they try, the more it looks like they’re trying too hard.
Even the Darth Vader spot they ran during the superbowl a few years ago for the new Passat, while clever and supremely well executed, just doesn’t mesh with the reality of the product the advertisement was trying to sell. It was a way of connecting with those mid-30s to late 40somethings who had families, drove VWs back in the day and tried to connect with some nostalgia. The reality, however, fell flat on its face when you went to the dealer to actually drive a new Passat. Nice enough car, sure, but damn is it dull and compared to the competition……eeek.
VW has been squeezed by Asian manufacturers who learned how to inject some emotion and mojo into their product (eg: Subaru, Mazda, Hyundai, Kia), by their own sister brand, Audi, who has moved downmarket and is sucking up the $30k and up market, and by a mismatch between market demands, stale product and flat marketing. Sucks to be them right now.
My point is that VW wants to sell at Hyundai-level volumes, while it positions itself as something closer to Mazda. That doesn’t make much sense.
If VW wants to sell a lot of cars to Americans, then it needs to emphasize value and quality. VW doesn’t do the things that high volume automakers need to do; it acts like a niche player, but then takes offense when it produces the sales of a niche player.
Agreed, PCH. Typical VW arrogance and ‘frustration’ with the American buyer.
MQB is not the problem (even if the transition costs have been higher than planned). The group now has seven cars on MQB, and many more in the pipeline, even if the Golf and the A3 are the only two out of the seven that have made it to North America.
MQB isn’t itself the problem, the issue is that VW can’t move the entire transverse portfolio to the new architecture fast enough to get those models into the hands of American consumers. The forthcoming CUV, SUV, Jetta and Passat replacements will all be MQB based. These are the core models that need updating (or introduction) much sooner rather than later.
Yes, but I would argue that it isn’t MQB that’s holding up those models. The new European Passat is already on MQB.
Agreed, as far as the Passat goes. Where we and a few other markets received the “NMS Passat” for MY2012, the world Passat continued as a heavily-facelifted version of the nicer 2006-2011 Passat that had been sold here. So for all intents and purposes, the Passat sold in Europe was quite old and needed to be replaced, hence the MQB version. Our Passat, however, is only a few years old and, if nothing else, VW probably wants to eke a couple or a few more model years out of it. It’s quite new by VW standards, and sells *reasonably* well. Replacing our Passat with the one now on sale in Europe would please the enthusiasts, but unless it were severely decontented, it would be priced in the stratosphere and would make the CC irrelevant.
I work in IT for a car dealership group and between our two moderately-sized pre-owned lots, we have five late-model Passats and eleven late-model Jettas (including a 6-speed GLI). It seems like we get a new (used) Jetta delivered for every day of the week.
You’re exactly right. The 2011 Jetta and Passat were somewhat disappointing. Why? Because Cruze. And Focus. And Fusion. And Sonata. And Elantra. And so forth. So then the Jetta and Passat felt rather cheap. And that would be fine, if they had been priced accordingly. But they weren’t. Really, Volkswagens still aren’t value propositions compared to competitors. They charge you for things that should be standard, and the prices are still fairly high, *especially* compared to Kia and Hyundai, who will give you a nicely-equipped car for $25K, one that is likely to last longer and cost less money when it needs fixing. Now they’re having to rush and backtrack on their de-contenting campaign with the 2015 refreshes. And yes, between the Tiguan (which is too small and overpriced) and the Touareg (which doesn’t seat enough people…and is overpriced), VW is missing out on the most important segment in today’s market.
De-decontenting started a few years ago already: disc brakes, IRS, xenon headlights, more soft interior materials etc have made their way back into (many/most of the) Jettas. As I recall, TDIs stay with the torsion beam suspension as the IRS doesn’t leave enough room for the urea tank.
“As I recall, TDIs stay with the torsion beam suspension as the IRS doesn’t leave enough room for the urea tank.”
That must mean they’ve moved to the new EA288 diesel that’s in the Golf. The pre-facelift Jetta sedan probably had the same non-urea, dpf-only diesel as my 2014 Jetta SportWagen. And I think the Passat TDI has always used urea.
Yes, the new Golf TSI has independent rear suspension. But the Golf TDI has torsion beam again due to the need for the urea tank on the EA288. The TSI is a nice engine that doesn’t do bad for economy (if you can keep your foot off it). If I do replace my 2012 Sportwagen in the next couple of years, it’ll probably be with the TSI wagon. Cheaper to buy, and most likely cheaper to run in the long term than a TDI. Plus better suspension.
The new Euro Passat is a *really* nice vehicle. It’s also what we will get here once the current VW factory in Tennessee is upgraded to handle MQB product. The biggest issue with the Euro Passat being sold here was that VW couldn’t import it at a profitable price point. Localized production will go a long way toward fixing that problem and as a result, moving forward we should get a much more comparable product. Will we get the trick digital dash that the Eurospec version gets? Who knows, but it won’t be the watered down variant we see today.
Localized production of things like Golf and Passat were big steps for Volkswagen. Like I mentioned earlier – timing can be everything sometimes.
Looks neat in that photo. Reflex silver, new nose, (previous GLI?) alloys look good. Now, how bout a 6 speed with that 1.8t?
Doesn’t need it. At least not much. It’s pretty mellow on the highway and the engine has more than enough torque to work through only five gears.
Really? This would be such good news. I had a two liter MKIV, and you could leave it in the fifth gear to eternity, but also endure 4000 rpm at 80. Are you sure this 5 speed keeps the torque but looses the high rpm in the highway?
I wish I paid enough attention to the tach on the highway. I was paying more attention to passing power and transmission behavior, so I don’t recall rpm at cruising speed. I don’t remember hearing much of the engine, though, so I came away with the impression that it was quiet and relaxed.
FWIW, I currently have the VW 5cylinder and it revs at a lofty 3000 rpm at 70. The engine is hardly audible on the freeway, and the 1.8 is a quieter unit.
The new 1.8 is pretty refined on the highway. It has a similar sound to the 2.5 when you accelerate. My wife has a 2014 Jetta with the 1.8 and it’s a fun car to drive even with the automatic. Power is always there when it’s requested and we’re averaging 28.3 MPG in mixed driving over 8000 miles so far on 87 octane gas.
It does indeed look like the pre-facelift GLI. We have a 2013 GLI 6-speed on our lot right now that I’m staring at. In particular, those LED/bi-xenon headlamps could—until now—only be had on the GLI or Hybrid.
I drove a 2015 GTI with the autobahn package a couple of days ago. Awesome car.
I made the mistake of driving one of those as well, in base S trim. Now I really want it.
Some doofus editor at Car and Driver just wrote that the 2.5 engine in the Mazda 3 makes it more of a GTI competitor than a Golf 1.8TSI competitor. Having driven all 3 I can say he is completely full of sh*t.
Yeah, the ’15 GTI is really well done. It’s a good sign of what’s to come once the other stablemates make their way to the MQB architecture. Unfortunately, the Jetta and US-spec Passat are at least 3 years away from that.
I’ll admit to quite liking the current Jetta. It handles and rides pretty well, feels solid, is extremely roomy, and as long as you stay away from the base 2.0 and don’t look at the dashboard, it doesn’t feel outdated to me. The 1.8 is a happy little engine and it will tear through traffic even with the automatic, but unfortunately it is hidden inside 4-year old sheet metal so no one knows of this improvement from looking at it.
The car feels old when you look at the dashboard design and on-board technology. The instrument panel and radio design could have been from 20 years ago, and other companies have managed to make their hard shell dashboards not look so shiny and cheap.
Perhaps if they could manage to lessen “traffic” in their service dept waiting room, they might just continue to increase traffic in the show room!
They always give me a loaner, so I just drop mine off. But you’re right.
VW desperately needs to get back to it’s core brand roots as the affordable German engineered car, with emphasis on the engineered, not so much the affordable, in light of their disastrous recent past. People will pay a premium for the German engineering. They don’t want a stripped down $hitbox trying to challenge Japanese/Korean dullmobiles on price. They will pay extra for that damn German engineering and will also put up with the reliabilty issues if they perceive they are getting something special. There are glimmers of hope. The new Golf/GTI is pretty damn nice. I like that the new Sportwagen will be a Golf, as it should be. The 2015 Jetta refinements are pretty good. Except for the fact that they are stilll offering that crappy 2.0 tractor engine in the base models.
German engineering – German cars have been unreliable and expensive to maintain. If they adopted Japanese reliability, then that would mean something.
With the popularity of all of the German luxury car brands, VW should be positioning themselves as the entry and aspirational stepping stone brand for the masses to this apparently much desired club. Not a Kia/Toyota/Honda clone.
Aspirational is just a niche. (Most US car sales are not motivated by German luxury car aspirations.) VW wants a level of sales that exceeds those of a niche brand.
At this point, VW’s German heritage is exactly what holds it back in the US market. Most Americans don’t particularly want a German car. (Some do, obviously, but many more do not.)
I’m with Pch101 on this one. There was a point in time that quirky and unique and “Germanness” helped to differentiate the brand to help them gain traction. The problem they’re having is that part of Volkswagen (Wolfsburg) is set on world domination and wants volume. The other part of VW (Hearndon) thinks differently about the positioning and as a result we have a branding/image/product mismatch.
As I’ve said before, Subaru is the model that Volkswagen should be following. They spent years in the woods (no pun intended) as the outdoorsy, quirky, engineer-loving brand. In the last five years or so they’ve seen the light and gone substantially more mainstream in both product and marketing. It’s working well for them.
Volkswagen is hurt by two major factors right now: a product drought and getting out from under a horrible reputation for reliability. The product drought will be remedied once they have competitive CUVs and SUVs along with an updated Passat and Jetta. The reputation issue is more difficult to fix and is like a bad breakup: time heals all wounds. Better for VW would be to slap a significantly improved warranty on the cars (5/60k bumper to bumper would be a great start).