By on October 9, 2015

2013-volkswagen-lineup

There has been a lot of coverage recently devoted to that scandal where Volkswagen revealed that its vehicles have been polluting like a chemical company that dumps out its waste in poor neighborhoods late at night.

But this scandal seems to have taken our eye off the Volkswagen ball. I say this because the whole “cheating on diesel” thing is not Volkswagen’s only issue. It is merely one of a myriad of problems that has launched the brand into the mediocre, also-ran position where they find themselves in America today. And right now, I’m here to remind you of the largest of these problems: that they spend their money on absolutely the wrong things.

The way Volkswagen chooses to allocate its resources is interesting, and I think about it constantly. If you were to also stop and think about it, you’d reach this conclusion: Volkswagen is the car company equivalent to the guy who earns $200,000 per year and still manages to fall behind on his mortgage payments. And here’s why I say that.

To start, you have Volkswagen’s core. The Jetta. The Passat. The Golf. These cars are good. Well, not good in the sense that they are good cars, but good in the sense that it’s a good thing Volkswagen is dumping a lot of money into popular vehicles such as these. The midsize sedan and compact car segments are the most competitive in the industry, and it’s important to keep your vehicles fresh, or else they’ll end up like the Dodge Journey.

Moving up in the Volkswagen chain, you have the Tiguan. This is not good. This car hasn’t been redesigned in like six years. It’s the oldest compact SUV on the market. It doesn’t even offer parking sensors. Fortunately, Volkswagen has admitted they plan to fully redesign this thing next year, so I’ll give them a pass.

And that’s all. Those are the only legitimately competitive automobiles Volkswagen makes. So where the hell does all their money go?

Let’s start with the Beetle and the Eos, which are two ridiculous vehicles that have no business remaining in this brand’s lineup. Whoever gave the green light to redesign the Beetle was insane: this is a compact car that found all of its eager buyers about six months after it first went on sale in 2000. Then they did some unique colors, and they did a convertible, and by now, everyone who wanted a Beetle a) already got one, and b) already ditched it, because it left them stranded at an AMC-24 cinema after an 8:30 p.m. showing of Bruce Almighty.

And yet, they redesigned it anyway, in some vain attempt to keep people interested.

At least it isn’t as bad as the Eos. While everyone is off developing SUVs and family cars that sell in the 10 zillion per year range, Volkswagen has devoted an enormous effort to creating the Eos: a small four-seater convertible with a folding hardtop that shares only a platform — and little else — with the Volkswagen Golf. If you think that’s ridiculous, consider this: though it was supposedly cancelled for 2015, the 2016 Eos starts at $33,000 with shipping. Base models have no backup camera and a manual passenger seat.

And then there’s the CC. Yes, there’s still the CC: a four-seater version of the Passat that was handsome when it came out during the waning days of the Eisenhower administration. If anyone can explain to me how this vehicle is still on the market, largely unchanged since its original creation, and selling for a base price of $34,000, I would be extremely interested to hear it. The words “more money than sense” must appear in your argument at least once.

And then there’s my personal favorite Volkswagen: the Touareg. In a world where all other desperate-for-sales automakers are going for midsize crossovers with affordable pricing, Volkswagen instead continues selling a high-end luxury SUV with a base price of $47,700 with shipping. For that money, you can get not only an Explorer, but also a Fiesta. And you’ll still have enough left over to buy one of those car dealership window markers in order to write “HA HA” on the exterior glass of any Touareg you encounter. Which, let’s be honest, won’t be many.

If you take a look at the lineup of a successful brand, such as Honda, you’ll see some major differences. There’s a subcompact car (the Fit) that sells tremendously well. There’s a minivan (the Odyssey) that sells tremendously well. There are two always-getting-updated SUVs (the CR-V and the Pilot) that sell tremendously well. And then, finally, you have a compact car and a midsize sedan. These are the only similarities to the Volkswagen lineup.

Assuming, of course, that Honda isn’t lying to us and the Odyssey is actually polluting like the train engine in Back to the Future: Part 2.

I’ll never quite understand Volkswagen’s decision to do things this way. Instead of the Eos, they could’ve had a new Tiguan three years ago. Instead of the Beetle, they could’ve had a midsize SUV five years ago. Instead of the Touareg, they could’ve given the Passat and Jetta more modern technology. But instead of making the decisions I would’ve made, they just complain about how they don’t understand the U.S. market.

Maybe the fumes are getting to them.

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96 Comments on “Volkswagen Spends Its Money On The Wrong Things...”


  • avatar
    sparc

    they also have the largest R&D budget of any company in the world. You could combine the R&D budget of multiple other car companies and VW would probably still win.

    That’s how badly VW is managed. This trainwreck was basically waiting to blow up even without the emissions scandal. Maybe it will at least force some change.

  • avatar
    sirwired

    Don’t forget their occasional threats to bring the Phaeton back to the US market!

    • 0 avatar
      TonyJZX

      And that car summarises whats wrong with VW. They have a lot of money. They know the VW badge isnt as shiny as the big German three. They kind of want the VW brand to be closer to the big three. The company is of the type that thinks they know what kind of product the public wants. They also love vanity projects. They’re kind of in love with their ‘storied’ past. That results in two kinds of products… stuff that doesnt sell and undercooked stuff that does sell.

      • 0 avatar
        Piston Slap Yo Mama

        The crowd that blindly buys Apple products because they perceive it as Thinking Different are the same people buying VW’s.
        Also, they need a car to slap their Apple logo stickers on.

        • 0 avatar
          Shawnski

          Huh? In my world view Apple is very much generic, not like a VW zang to zing’s conformity.

          • 0 avatar
            JRoth

            The fact that he’s quoting a 15 year old slogan may tell you something about how up to date his worldview is.

            Apple has gone from the verge of bankruptcy to the largest, most profitable company in the world, but people with chips on their shoulders haven’t changed their tune at all. Kind of impressive, in a way.

  • avatar
    threeer

    And yet (not counting this recent turn of events) they are one of the largest car companies in the world. Sure, they monumentally botched their operations in North America, but the rest of the world seems to love VW. And the Golf IS a good car, despite what was inferred in this piece.

    It will be interesting to see what impact the emissions test debacle will have on the company’s position and standing in the marketplace…not so much here in America, but the rest of the world.

  • avatar
    fishiftstick

    Another thing they should have spent money on: reliability.

    Today, building reliable cars is not a mysterious dark art. When an automaker with the resources and volume of Volkswagen makes unreliable cars, it’s because they have made a conscious decision to skimp on quality and screw their customers. Just like Volkswagen made a conscious decision to screw their diesel customers, the EPA, and folks who breathe.

    As GM learned, this is a disastrous long-term strategy–even when your cars are price competitive, and don’t attempt to charge a premium for das Detroit engineering.

    • 0 avatar
      sirwired

      VW reliability is actually greatly improved. The latest engines are holding together fairly well, and the electrics are not the glitchy nightmare they once were.

    • 0 avatar
      kablamo

      Interesting to parallel GM and VW.

      Both have (or are) finding out that when your cars get a reputation for being unreliable it’s near impossible to overcome it. Even if they now truly were dependable, they pay for the sins of their fathers for decades. North America, with its extreme weather, vast distances and driving culture values not leaving you stranded pretty highly.

      What this fiasco really makes me wonder is how much of VW’s unreliability might be intentional. Who’s to say there isn’t an algorithm to kill some sensor after x number of cycles? This has happened in other consumer products. So did they save money on R&D, or program something to fail at some variable interval?

      • 0 avatar
        Shawnski

        GM unreliability? News to me and the vast majority of their owners. Totally unhip and floundering for sure, but GM rarely makes a misstep when it comes to day to day useability. And yes GM no longer leads the way in any segment except for neo Supercars aka Corvette, which should be a separate entity (within GM) like Porsche. ‘Vette SUV anyone? I am sorry a Tahoe is not good enough.

        • 0 avatar
          Toad

          GM is notorious for unreliable cars, from the Vega engine to the current ignition switch fiasco and dozens of major problems in between (Olds diesel, HT4100 engine, Dexcool, intake gasket failures, and on and on). The company did not lose half of it’s market share and veer into bankruptcy because it overachieved in the quality department.

          The remaining owners of GM vehicles have self selected: they are unaware of GM’s reputation, are in denial of history, or have an emotional (or economic) connection to the brand that overrides rational behavior.

          • 0 avatar
            highdesertcat

            Toad, you hit the nail right on the head with notoriously unreliable cars. Been there and done that up until I bought my first Toyota product in 2008.

            Shawnski is misinterpreting GM’s slogan of ” A GM Product Runs Badly Longer Than Any Other Brand” as being the equivalent to day to day usability.

  • avatar
    hreardon

    Well Doug, thanks for adding to the armchair quarterbacking of Volkswagen for the last three years. Please just add these comments to any number of threads about VW’s North American lineup.

    They screwed the pooch on CUV and SUV popularity. They miscalculated the brand positioning with Phaeton. They underinvested in North America.

    These ills are being remedied now. Chattanooga, Puebla and MK7 Golf, new Tiguan, Crossblue. Improvements to the bottom line are a few years out (well, prior to the diesel fiasco, but let’s contain our criticism for the moment).

    Rinse, wash, repeat.

    • 0 avatar
      30-mile fetch

      “Well Doug, thanks for adding to the armchair quarterbacking of Volkswagen for the last three years. Please just add these comments to any number of threads about VW’s North American lineup.”

      Bingo. This article has been recycled so many times I can only hope Doug wasn’t paid much to “write” it. I’m assuming he also knows that significant automotive markets exist outside the US and Canada.

      • 0 avatar
        frozenman

        Any article that provides evidence that these “jar heads” are not as superior as they think they are is welcome in my books. Maybe one day it will sink in for them, but I doubt it.

  • avatar
    dss10

    VW’s problem is that they, like most large car companies, are afraid of lowering their per unit price/profit by having product cannibalization of their expensive (slow selling products) by their less expensive lower price/profit products (that would sell well in this market). Want a Passat wagon in the US, too bad, they will steer you to a touareg or a Tiguan. I tried to buy a TDI Sportwagen about a month ago (dodged a bullit) but they were doing everything possible to put my butt in a Touareg to the point I gave up and walked out…. The fact that they won’t offer their entire product line here (polo/golf/….Fat space inefficient SUV’s…/Vans/Pick ups) in their largest market is ridiculous when you can buy practically every car and truck they make in New Zealand (hobbit land) which has the populations of Delaware….

    http://www.volkswagen.co.nz/new-cars/

    • 0 avatar
      MBella

      North America is not their biggest market by a very large margin.

    • 0 avatar
      jansob

      This is eerily similar to a dear friend’s experience….the wagon was “hard-to-find, would take a while to get….the one on the lot is promised to another customer, but have you driven the Taureg? We’ve got three to choose from.” She said “Are you telling me you won’t sell me a Sportwagen?” “I’m telling you you won’t want one once you drive the Taureg.”
      She loves her Outback.

    • 0 avatar
      smartascii

      This is because regulations. VW isn’t thinking that we don’t get/deserve the Anorak or Sharan or whatever, they’re thinking that it won’t hold a candle to the F150/Grand Caravan in the sales department, and they’re not going to spend the several million dollars necessary to federalize the thing so that they can make a few thousand sales. How they can get this fact and not understand why a CR-V outsells their Tiguan is a mystery to me, but I think it shows that they’re not stupid, just stubborn. I expect it’s the same kind of stubbornness present in people who get pissed off when they hear, “Marque dos para Espanol” on their call to the electric company.

  • avatar
    LeMansteve

    The Eos and Beetle share a platform with several other global VW models, so the cost to keep them going is probably not significant, and/or VW just wants to squeeze every last ounce out of them to reach a financial target on the tooling. I feel the same way about the CR-Z, which Honda somehow continues to offer.

    The Tiguan is non-competitive but a replacement is being developed. Who knows how the expensive diesel scandal will affect the final development on this new model.

    The Touareg? Man, who knows. You can get a loaded MDX for similar money. Perhaps Audi SUVs are subsidizing this one. I would expect a replacement to be in the works there, too.

    • 0 avatar
      JohnTaurus_3.0_AX4N

      His complaint was that they didnt just run the Beetle until demand was exhausted and are still doing so to squeese the last drop out of the first gen, they developed an all new one, fully redesigned and sharing little or nothing with the first generation. It might be based on the Golf, but the body and interior are absolutely different, and that costs money that couldve been better spent developing a decent CRV/Escape (Kuga) rival based on the same platform. It wouldve cost to add AWD, chassis upgrades and unique body/interior, but just look how well Honda, Ford, Toyota and even Hyundai/Kia do with their vehicles in this segment and tell me the New Beetle is more important. Hell, FCA even developed the successful Cherokee on their meager budget and rushed timeframe.

      Compare the worst selling compact mainstream SUV/Crossover that is not the Tiguan (Patriot or Compass? Not sure) to sales of the New Beetle and tell me its all okay because it shares a platform with like 75 other cars sold worldwide. The same can be said for the Eos. Being based on a paid-for platform is not a logical excuse for not developing a worthy compeditor in a hot segment and instead wasting the effort on what is best described as niche` players.

      • 0 avatar
        bball40dtw

        They ran that first gen New Beetle until the 2010 model year. It didn’t even start with good bones like the XC90 or SuperDuty. It’s a $hitty MkIV VW. I took one on 1400 mile round trip (my Jetta was in the shop for a failure that was covered under warranty. surprise. surprise.) in AZ and UT. It was an awful car. Uncomfortable driving position, lack of space, poor MPG, and poor NVH. Terrible.

    • 0 avatar

      It looks like they sell the EOS globally. It doesn’t really cost them anything beyond the cost of federalizing it to sell it here, so they might as well keep selling it here.

      I’d love to see them sell the Aramok here. We Americans do love our pickups. Maybe TPP will kill the chicken tax and it will happen.

  • avatar
    319583076

    Well, comparing Honda’s successes against VW’s failures *has* to include consideration of quality and reliability instead of simply comparing the product lineups. However, point taken. VW’s lineup isn’t optimal and their lackluster quality and reliability aren’t helping.

    • 0 avatar

      Additional irony is how before Doug TTAC B&B board was all how “Honda lost its way” and basically second only to Misubishi in the queue to exit U.S. market. Akura was being dragged through mud as worse than Lincoln, too (although perhaps somewhat deserved). But now Honda is somehow the epitome of success. How did that happen, it’s magic of hype and poorly researched comparisons.

  • avatar
    Car Ramrod

    Obnoxious Nitpick of the Day: The train was in Back to the Future Part III

    • 0 avatar
      JMII

      Came here to post the same thing.

      Personally I think VW should have spent money on things like window regulators that actually work. But since they didn’t my wife wants nothing to do with VAG products after our Passat experience… well unless its an Audi R8.

      This whole scandal is pretty depressing as VW was the one manufacture that pushing diesel into the mainstream, now they scared everyone back to gas.

    • 0 avatar
      Sammy B

      Yah, come on. I except more from Doug on this. LAZY JOURNALISM.

      Also, if it’s Doc’s train engine, I’m not sure it even pollutes at all.

      Either way, with all the Back to the Future stuff happening now (“future day” being 10/21/15 and all), you gotta be accurate, Doug. Stakes are higher than saying the G20 is a dressed up Sentra

    • 0 avatar
      bumpy ii

      Yeah. Part II was Marty and Jennifer’s dumb kids, and Gray’s Sports Almanac.

    • 0 avatar
      FreedMike

      Picky, picky, picky…how dare you challenge his rant?

    • 0 avatar
      Balto

      +1, felt an intense need to come here and correct that.

  • avatar
    blueflame6

    I don’t know how you can write an entire article about VW spending money badly without bringing up the entire Bugatti project.

    By all appearances, VW is one of the giant organizations where everybody is locally optimizing to win at their own internal political game resulting in the overall company doing stupid, stupid, stupid things.

    • 0 avatar
      JohnTaurus_3.0_AX4N

      Maybe he figured they need a halo. Ford developed the last GT when things were going very badly for the company. Im confident it boosted morale both inside and outside the company and played a role in getting them through the rough patch. They were busy with developing the new Fusion/Mondeo, F-150, Escape/Kuga and so forth but needed a bridge to get them through until those were ready. That bridge came in the form of a super car that actually made money (I doubt it was expected to).

      • 0 avatar
        Russycle

        I agree about Bugatti. Halo car fail. Sure, it’s insanely quick, but how many people associate VW with Bugatti? Sure, enthusiasts know, but your average Joe won’t look at a Bugatti and think “Wow, VW sure can make a sweet ride!”

        • 0 avatar
          hreardon

          If you want to get to the core of why things went awry for Volkswagen in North America, there are two things people are forgetting when it comes to halo products – and halo products from Piech era Volkswagen in particular:

          1. Halo products are about more than just marketing. They’re about technology transfers as well. Audi and Porsches’ racing programs are good examples of this.

          2. You need to remember who Ferdinand Piech is and what he values. This understanding plays into the whole diesel fiasco as well. Piech values engineering prowess above everything else. It’s a single-minded pursuit of his, has been his whole life. This became more important in the 1980s when the Germans realized they couldn’t out-price the Americans and out-reliable the Japanese: as a result they focused on technological innovation to distance themselves from everyone else.

          Bugatti, Lamborghini and Phaeton are in many ways vanity projects for Piech, but they’re also technological shows of force to demonstrate to both the German competitors BMW and Mercedes as well as the rest of the world that VW has the muscle.

          Considering Piech’s reputation for being incredibly stern, demanding and refusing to accept ‘no’ to his engineering demands, it comes as no surprise that his underlings did whatever was necessary to bring his vision (demands) to fruition. If Piech demanded a hardtop (Eos) to compete with Mercedes, he got it. When he wanted to compete with the S-Class because Mercedes moved into Volkswagen’s mainstream space, he got it (Phaeton).

          • 0 avatar
            Lorenzo

            I think you hit the nail on the head. Piech’s involvement may well never be brought up, he has too much support among allies in management, family in the ownership, and stock in the company.

    • 0 avatar
      stroker49

      Bugatti is just the tip of the iceberg! You forget that they are badge engineering worse than GM! They are making too nice Skodas and too sporty that competes with VW and Audi and VW is competing with said Audi and then they have Seat and nobody understand why.

      • 0 avatar
        Kyree S. Williams

        For the umpteenth time, that is not badge-engineering. It’s common for automakers to have different brands whose vehicles intersect at certain price points and share platforms, like the Skoda and SEAT models you mention, or the fact that the A3 shares a platform with the Mk.7 Golf.

        Badge-engineering, OTOH, is when vehicle shares the same body and chassis with that of another brand, and has few meaningful differences from another vehicle, and the only perceived differences are due to the badge. A good example of this would be the Yukon versus the Tahoe. They’re pretty much the same. Badge-engineering was when Ford decided to take the F-150 and sell it as a gussied-up Lincoln more than once (a tactic which, I might add, continued to be employed for the Mexican market until the recent 2015 F-150 redesign).

        But even with GM, it’s just the trucks and large SUVs that are badge-engineered these days. I can’t think of a single thing that Volkswagen badge-engineered…well…ever.

        • 0 avatar

          I think the Routan counts as badge engineering.

          • 0 avatar
            Kyree S. Williams

            You’re right; I forgot about that one. That’s definitely badge engineering. And the Porsche 914, which was also sold overseas as a Volkswagen, was as well. Still, Volkswagen’s lineup is hardly an example of badge-engineering.

        • 0 avatar
          krhodes1

          They do it, but they do it in smart ways. The Routan was badge engineered, but it was not a badge engineering of another VAG product. It just filled a niche, just like how Honda and Isuzu swapped things around back in the day. They still sell the original Audi A4 as a SEAT as another example, but not when they were still selling it as an Audi. They sell all sorts of older cars in China badged as this and that. But they don’t have the same car with different badges competing against each other like GM was so wonderfully good at.

        • 0 avatar
          Carilloskis

          Most people who are not enthusiasts don’t know about the badge engineering I had a friend get into my suburban and comment that it looked like his parents escalade on the inside. I had to explain that they where the same vehicle built on the same line in the same plant. The only people who where not fooled by badge engineering where f-150 owners(because no one in the US bought a backwood or Mark LT.) so ford canceled the Lincoln truck threw some blue ovals at it and called it the f-150 platinum and sell more of that one trim level than Lincoln ever did In pick ups. Full size pickups in the US are unique in the fact that one can go from bare bones versions with vinal seats and floors with crank windows to luxary ones that cost 3.5 times as much with massaging seats with heat and cool auto climate control wood carbon fiber inlays soft touch materials . In VW you have to go from VW to Audi to Posche to get that type of range.

  • avatar
    Zykotec

    VW’s line-up is directed at the European market, in which it is king, Hondas line-up is directed at the US market, also quite successfully. Neither brand is able to convince buyers on the other side of the Atlantic, even Mitsubishi is a serious contender to Honda over here, not to mention Mazda. Considering we see almost as many mk3’s as mk4 Golfs on the road, their reliability took a dive in the 90’s, but nothing near the reputation they have in the US.
    btw, I’m by far not a VW fan, and I have never, and will never own a watercooled VW, but I think the CC looks great…
    Also, I think VW sells more Tiguans here than Honda sell cars in total.

    • 0 avatar
      MBella

      The CC is also an easy way to sell a Passat for more money. It can’t cost a whole bunch to keep building them and the extra markup is going to substantially make up for it.

    • 0 avatar
      FreedMike

      “VW’s line-up is directed at the European market…”

      So is the meat of Ford’s lineup. You can buy a Fusion, Focus, Fiesta or Escape (Kuga) in Europe that’s pretty much identical to an American model (no diesels, of course).

      • 0 avatar
        krhodes1

        And Ford makes all of their profit in the US on F-150s. Possibly all of their profits period. And at least for the Fusion, yes, you can buy a Modeo sedan in Europe, but nobody does. You can’t buy a Mondeo with a hatch in the US. Do they even sell the sedan versions of the Focus and Fiesta in Europe? A quick look at the Ford UK website says they don’t there. They sell the Fiesta in 3dr and 5dr hatch, and the Focus in 5dr hatch and 5dr wagon form. Not nearly the same as what we get in the US, where the sedans versions of both are the big sellers. CUVs sell all over these days, though I bet you would be hard pressed to find many Kugas with gas engines, never mind the monster motors Ford sticks in them here.

        Ford and VW bet on different things in the US market at slightly different times. VW bet that they needed to sell cheaper cars, so they made the decontented US-specific Jetta and Passat. And it WORKED, for a while. Sales doubled in a coupe years, then started sliding. Ford bet the opposite a few years later, that Americans were willing to pay MORE for nicer cars. And they were RIGHT! The people who buy new cars today can afford to buy nicer cars, helped by longer finance terms and leasing. And I think SUV/CUV pricing has made people more comfortable with the idea of paying more for everything. VW made the right move at the time, but then kept at the cheap and cheerful for a couple years too long. The next generations will presumably be back to more what we traditionally think a VW is like inside.

        Do recall that when the new Fords debuted the B&B got the vapors over the MSRPs being so much higher than previous versions.

        • 0 avatar
          Shawnski

          Did u realize that Ford sells more Fiesta’s worldwide than F series? Yes, revenue is less on cars, but relitive profit is similar to the F series. Don’t’ forget SUVs are profitable too and Ford sells a lot of ’em

  • avatar
    Mackie

    What a rant. I get what you’re saying but we’ve heard this before. BTW the New Beetle was released in 1998, not 2000. Less ranting and more fact-checking, please.

  • avatar
    Waftable Torque

    Working in financial services, the $200k household that can barely make their mortgage happens more often than you think, or at least here in Alberta, where the recession is showing us who’s swimming naked.

    We’re always trading stories of those with nice homes and the latest cars/electronics, but their balance sheet or cash flow is a mess. A good rule of thumb that apparently only financial planners listen to is to buy just enough house so that if one person is laid off or disabled, you can support the household on a single income. Instead, we keep sitting down with people who bought the biggest house they could afford, and drive a car based on extended monthly payments. I’d love the same stuff too, but only if I could pay cash, and not at the expense of other stuff more important to me like travel or financial independence.

    You’d think that those who make more save more, but the millionaire next door is a real phenomenon.

  • avatar
    FreedMike

    Interesting, Subaru doesn’t offer a midsize SUV, or a minivan, its’ compact and midsize sedans don’t sell all that well (because they aren’t all that good), and it doesn’t get trashed.

    Of course, that would make it an actual story versus a bunch of ranting.

    • 0 avatar
      JohnTaurus_3.0_AX4N

      Subaru has carved themselves out a slice of the pie and their sales are booming, and were even during the recession. Perhaps the fact that they have found success would preclude them from being lumped in with slumping VWOA. Subaru also isnt nearly as large, nor do they have the resources that VW has. Their excuse for being a relatively small player is that they are a relatively small player.

      VW, as everyone keeps pointing out, is one of the worlds largest automakers and therefor has no excuse for not developing models that compete with very well selling products like Pilot, Explorer and Grand Cherokee.

      • 0 avatar

        There is a really good book called “where the suckers moon” written about Subaru’s attempt in the ’90’s to be a mainstream car manufacture competing with Toyota and Honda. Spoiler alert: it failed. They went back to focusing on being a niche 4wd company, got the brilliant idea to jack up a Legacy and put body cladding on it and call it an Outback, and started selling again.

        It’s also worth noting that while Honda has a full lineup now, they spent much of the 80’s and 90’s avoiding the realities of the American market. They tried selling Accord wagons instead of minivans, and then the original Oddessy was a weird tall wagon. They avoided SUV’s, and then sold a rebadged Isuzu, before making the Pilot. They made some weird unibody Pilot with a little bed instead of a real pickup.

    • 0 avatar
      whynot

      Subaru has a competitive compact CUV, however, which is something VW still lacks. In fact Subaru went through a full generation of it and released a new one in the same time span that the Tiguan has been available.

      From a company, that it is worth repeating, that is far far smaller than VW.

      • 0 avatar
        gtemnykh

        Subaru is in a unique position in the current CUV boom in that their best known products ARE ALL CUVs, and very competent and competitively prices ones at that (Outback, Forester, Crosstrek XV). The Impreza might not be the biggest seller but the much-pricier and higher margin CrossTrek does very well indeed. Throw in very savvy marketing (“love,” safety, dogs, little stickers to let everyone know your favorite activities) and you’ve got yourself a recipe for success. They are also breaking out of their niche markets in the mountainous West and the North East, into the Midwest en-masse.

        Subaru sells the closest thing to an old Civic wagovan RT4WD or Tercel sr5 4wd, while making them palatable and relevant in today’s world, and I respect them immensely for that.

        • 0 avatar
          ihatetrees

          Well put. Subie markets well to a safety concerned, coastal, middle class demographic. My sister and ex-GF, both in education, love the brand. So do their co-workers.
          And I don’t think any are lesbians.

      • 0 avatar
        FreedMike

        I’d say the Tiguan’s problem isn’t that it’s an uncompetitive product – I’d say it’s an overpriced product.

        • 0 avatar
          gtemnykh

          Tiguan’s biggest issues (IMO):

          Small cargo area. 23.8 cu ft with seats up is much lower than just about every other compact crossover, which have 35-38 cu ft.

          Poor powertrain/drivetrain reliability. VAG 2.0T, DSG. ‘Nuff said.

          And yes the overpricing is a big/biggest factor in addition to the two above.

  • avatar
    IAhawkeye

    The Fit sells tremendously well?? That’s not a joke or a cut to the car, I honestly have only ever seen a handful of them.

    • 0 avatar
      wolfinator

      Perhaps it’s a regional thing? I see them around in respectable numbers.

      Apparently the 2015 model is selling well. Perhaps that’s what Doug meant.

      http://www.torquenews.com/1574/record-2015-honda-fit-sales-buck-auto-buying-trend

      • 0 avatar
        IAhawkeye

        Must be.. we have quite a few Honda dealers around here, but a quick search of their new inventory shows only one dealership even stocks them, and they only had 2 at that.

        • 0 avatar

          Hmm, the nearest dealer to me has 8. Which would seem like a lot, until you realize they have almost 350 Civic sedans. And 12 Crosstours.

        • 0 avatar
          April S

          Recently I visited my local Honda dealership with the intent to purchase a new Fit. The salesperson told me flat out they will not order any 2016’s but they were sure willing to sell me one of the many leftover 2015 Civics littering the dealership lot.

          Anyway, I guess they still play the old game of doing what is best for them (pushing what they have too many of) and not what the customer desires.

          P.S. Looks like they helped Ford sell another Fiesta.

    • 0 avatar
      Balto

      I see at least 15-20 per day in Maryland, but almost none in the mountainous and snowy northeast.

    • 0 avatar
      Lack Thereof

      They are insanely popular in urban areas. They fill the same niche as the Focus hatch to the parallel-parking crowd.

  • avatar
    olddavid

    Put your pants back on and re-enter the land of the living. This “humor” is as thin as the real value of Ferrari stock. And stay off my lawn.

  • avatar
    PeugeotHound

    Opening myself up to a barrage of arrows by posting on this thread but let me step forward as someone who signed for a 2016 Touareg TDI two hours before the EPA issued its Friday afternoon news release announcing the defeat device. Agreed — VW’s model mix is not well suited to the American market and the Wolfsburg corporate culture seems to better resemble the management of the Veterans Administration instead of a global innovator that moves with alacrity. A lot of culture change has to happen at VW to erase the environment that allowed this scandal to happen.

    That said, as the previous owner of an Acura RDX (1st gen), and Acura RL I cross shopped the Touareg and MDX. I had owned Audis (’00 S4, ’01 allroad) and had abandoned the brand for Acura because of the terrible repair records I experienced with the Audis. The Acuras were as reliable as a wood stove but they always felt a bit light and flimsy and there was nothing aspirational about them. Driving through the snow here in Colorado always produced loud noise in the cabin as snow was thrown up inside the wheel wells and sounded like it was about to punch through the firewall. The Audis always felt like I was inside a bank vault.

    So, after driving the MDX and Touareg back to back the same difference was there. The MDX felt unsubstantial as if it floating on top of the pavement. The Touareg felt like it was IN the pavement. Then, I started noticing things like door hinges. On the MDX they were stamped steel. On the Touareg they were thick castings.

    So, I gave up a few bells and whistles on the MDX and paid more for the Touareg. I’m at peace having zagged instead of zigged. I’ll brush off the snarks when people see the TDI badge on the back of the Treg, even though they’re too ill-informed to know the 3.0 V6 TDI is not implicated in the scandal. It will take Volkswagen two to three years to restore its reputation. I plan to keep my Treg for 10.

  • avatar
    sgeffe

    Wasn’t the CC VW’s way of satisfying the (few) folks who wanted a mid-size with the V6 (which I thought had been yanked from the Passat after they “Americanized” and decontented it)?

    That decontenting I mentioned was another misstep, IMHO. Similar to the gross misstep Honda took with the 9th-Gen Civic, although, to have messed up on VW’s scale, Honda would have had to fit the entire range with paper door cards and twist-beam rear suspensions, not just one car (figuratively speaking, of course — the 9th-Gen rear suspension in the N/A Civic was independent multi-link).

    • 0 avatar
      30-mile fetch

      “That decontenting I mentioned was another misstep, IMHO”

      Not sure what you mean. American annual Passat sales:

      2009 11,000
      2010 12,500
      (Initiate Decontenting!)
      2012 117,000
      2013 110,000

      The Passat was a pricey 9/10s scale midsizer with a level of equipment, interior materials, and turbo drivetrain that the North American market was unwilling to pay for. The decontented 2012 was far better aligned with this market and still nicer than a 2012 Accord inside. Four model years in and it’s getting long in the tooth, especially with the outdated infotainment and really competitive entries from other manufacturers. But the 2012 decontenting was the right play.

    • 0 avatar
      Maymar

      You can still get a V6 in the Americanized Passat, but apparently MSRP starts at $36k on one of those, so basically no one actually takes them up on that.

  • avatar
    mjal

    The CC has little if nothing in common with the current US Passat. It’s based on the old Passat, and is still built in Germany, one of the last VW sold in the US to hold that distinction. Having driven both cars, the CC feels like a more refined car, with superior interior quality bits and very quiet. Sure it’s got an old school radio with no USB, etc., but the car definitely felt more upscale, Audi-like. And it does now have 5 seats.

    • 0 avatar
      PeugeotHound

      You’re right about the CC. I recently test drove a lightly used, certified CC with the 2.0 turbo engine and a six-speed manual. Aside from the slightly outdated electronics it was a very nice package, especially with the stick.

  • avatar
    Sigivald

    re. the Beetle, GCBC says they’re selling something like 2200 a month in the US (less in winter, more in summer).

    In 2014 they sold 30,000 of them, and they’re on track to maybe 27k this year (depending on how bad the general VW malaise hits the model).

    GCBC says the Golf sold … 34,000 units or so in 2014.

    (The Golf is doing *much* better this year, of course, with 50k sold YTD.)

    So … the Beetle is a worthless car that sold all it’d sell in six months, but the Golf is bread and butter?

    They sold within about 10% of the same volume last year.

    I mean, I agree the Beetle is a niche car overall in comparison, and that the Golf *should* get more update love … but the sales numbers don’t agree with your thesis, entirely.

  • avatar
    krhodes1

    Can we step back from our naval-gazing at the American market for a moment?

    VW has been in the top three of GLOBAL auto sales leaders for years. They have been in spitting distance of #1 for most of those years. Toyota does just about as well in Europe as VW does in the US, and nobody around here is calling Toyota mismanaged and incompetent. VW is doing FAR better in China than Toyota, and that is where the real potential is in the future, not the US or Europe. VW sells largely similar product in the US that they sell in the rest of the world, Jetta and Passat excepted. Toyota largely makes bespoke product for the US and sells those cars in very few other places. Six to one, half dozen to the other.

    800,000 sales a year in US WOULD make VW firmly #1 in the world (especially as those 400K sales have to come from other makers here), but I suspect that the cost of achieving that level of sales in this market is not really worth it. The product that sells here largely does not sell elsewhere.

    As for why sell the Toureg and the EOS here – good lord, the profit margin on them has to be obscene at the prices they charge! The EOS is 90% the same as a $18K Golf, and the Toureg IS the same thing as the big Audi and Porsche SUVs, just decontented and sold a bit cheaper. You can sell a billion Corollas and make $50 each on them, or a handful of EOS and Toureg at $15-$25K profit each.

    Dougie being a former Porsche employee should certainly understand that particular business model.

    • 0 avatar
      gtemnykh

      If you seriously think they are making $15k profit on an EOS, you’re WAY off IMO. It’s not “90% the same,” the chassis engineering that most likely went into turning the Golf into a convertible with a power folding top is definitely non-trivial. No one here short of a VW insider really knows the profit baked into one of these things, but I’m willing to bet it isn’t as much as what Doug is saying and it isn’t as little as you are implying.

    • 0 avatar
      Dr. Claw

      Yep. And dammit, the Beetle IS VW. It’s kind of a weird “halo” car for the brand.

  • avatar
    PandaBear

    I’ve seen this in many big corporations I worked in. In a nut shell it is about politics, because VP A and team works on product A and VP B and team works on product B. Despite product B being the next big thing and product A is dying, the company keeps making and refreshing product A because of VP A’s personal decision to hold on to power and keep VP B from threatening VP A’s empire building.

    This would be the CEO, President, and Chairman’s job to see this and stop the nonsense. Sometimes they don’t, because they have their personal reasons.

  • avatar
    z9

    VW has partial interests in plants all over the place, partial interests in other brands, partial ownership by the German state, and who knows what else. For example, the plant that builds the Eos in Portugal started as a 50/50 joint venture with Ford, but then Ford pulled out, and the plant, operating in some bizarre quasi-independent fashion that only aficionados of German corporate structure could appreciate, is forced to bid against other plants to build new models. You can imagine VW’s business development team has contributed to their worldwide expansion, but now they’re saddled with a web of contracts, operating agreements, and obligations that make it very difficult to execute the product changes they will need to make. Your greatest strength is often your greatest weakness.

  • avatar
    RideHeight

    Please, VW, if you survive in America, bring over the Caddy. It’s the coolest sub-minivan in ze welt!

  • avatar
    ihatetrees

    How about VW management’s insanity regarding the union issues at their Chattanooga plant? What’s wrong with the Toyondissan model of ignoring unions (while your employees quietly shiv them with an solid rejection vote)?

  • avatar
    cowboysanchez

    As a regular customer of the place in town that does a $49.95 “kwik service” oil change, I note an absence of VWs at said establishment. The fact is they are expensive to maintain, so people often don’t maintain them and the tolerances are too fiddly for an aftermarket product to save money.

    It makes me wonder what sort of cars do people trade in on VWs? When I looked at one, the salesman gave me a look of “philistine” when I said I drove a 1998 Lumina. However, the current Jetta and Passat in US form are chasing sales from mainstream brands.

  • avatar
    drivrBob

    Yes! I agree on whats written here. Wasting money on nostalga is nuts! Even here in Europe a beetle is a rare site. However, one does have to give em credit for making recent advancements in alternative energies. Namely in bringing to market, here in Europe, their hybrid electric and CNG (Compressed Natural Gas) cars. Which is the main reason after searching for a CNG auto I finally chose a new Golf wagen. This car also has the 1.4L turbo and compressor motor using actually not much gas and or gasoline. Although underpowered for my likeing, its adequate and easy on my gas bill. Also, not to mention its a well built car with great handling. Like, not even a rattle on a bumpy road or the autobahn.

  • avatar
    drivrBob

    Aside from wasting money, They could maybe put something into renamming their whole lineup of mediocer model names. Lets face it, does anyone really want to be caught driving a Touron (sounds like Tourist and Moron). And what if you dont play Golf? Should you drive around in one? And who is so passive for a Passat? Come on VW, at least throw some dough into better model names!


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