Volkswagen Spends Its Money On The Wrong Things

Doug DeMuro
by Doug DeMuro
volkswagen spends its money on the wrong things

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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2 of 96 comments
  • DrivrBob DrivrBob on Oct 17, 2015

    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.

  • DrivrBob DrivrBob on Oct 17, 2015

    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!

  • VX1NG I think it should but I am open and curious to hear the arguments from those who oppose income based fines.
  • EBFlex No
  • VX1NG My understanding is that by removing analog AM capabilities it will force the AM industry to transition to either analog FM or digital radio broadcasts. Both of which use radio bandwidth much more efficiently than analog AM. The downside with switching to digital radio broadcasts is, just like we saw with the analog to digital OTA TV transition; you either receive the signal or you don’t. Whereas analog FM does not have that same downside. The downside with switching to analog FM or digital FM is the coverage area is significantly smaller than AM.Phasing out analog AM would free up a large chunk of radio bandwidth and could allow for newer technologies to utilize the bandwidth.
  • Bill 80% of people do not know how to or check the condition/ status of air pressure in thier tires let alone the condition of thier tires. Periodic safety inspections ensures vehicle are safe to be on the roads. I sure would like to be confident the vehicles around me are safe because they passed a objective inspection. The cause for suspicion in the US is most safety inspection programs are subjective and do not use technology to make the determination if the vehicle is safe or not. Countries that that use technology for annual vehicle inspections have a fairly high failure rate. I live in California a state without safety inspections and the freeways are litter ed with tire fragments and parts of cars. Every time it rains the roads are congested from accidents. Instagram is full of videos of vehicles with the wheels coming of while driving on the freeway. Just hope you won't be on of the casualties that could have been prevented if the vehicle owner had spend $7-$20 for a periodic safety inspection.
  • Kcflyer The Prado is the GX. So they already did, a long time ago