By on May 20, 2016

Volkswagen Chattanooga Tower

Volkswagen can’t wait for the day when it doesn’t have to spend time and resources dealing with a huge, stressful scandal.

Grey skies will clear up eventually, so the automaker has 250 employees busily crafting its Strategy 2025, a plan designed to carry the company out of its darkest chapter and into future prosperity, Bloomberg reports.

Volkswagen has big, expensive (but not too expensive) things in the works, so say goodbye to the boring, sensible company you thought you knew. At least, that’s the implied message.

Desirable models — vehicles customers want to buy, not should buy — are at the heart of the automaker’s product strategy.

“In the end, a strategy is only good if it leads to products that excite people and that they want to buy,” Matthias Mueller said in a management meeting earlier today.

Strategy 2025 goes live a month from now, so the eight key planks contained within aren’t fully known yet. Who knows, there could be some exciting product announcements hiding in there.

What Mueller would admit to is his willingness to spent whatever his beleaguered operation can spare to fund a new business venture focused on mobility services.

Everyone’s doing it these day, you see, so you’ve gotta go with the flow. As part of its corporate makeover, the automaker will even consider partnering with other companies on some ventures.

Of course, any new expense has to take into account the $18.2 billion set aside to deal with the emissions scandal, its fines, lawsuits and associated buybacks and recalls. To afford a seat at the emerging technologies table, Mueller said the company must “significantly improve cost efficiency.”

In a bid to boost revenues and salvage its formerly good name, the company is already planning a crossover and SUV blitz in the U.S. marketplace. Americans want utility vehicles (which net piles of profit for automakers), so Volkswagen’s “small cars first” strategy of decades past is now dead and buried.

It’s a whole new you Volkswagen.

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56 Comments on “Volkswagen Plans to Let its Hair Down and Throw Off its Old Clothes in New Strategy...”


  • avatar
    CoreyDL

    “Mueller said the company must “significantly improve cost efficiency.””

    That’s fine, just cut out a bit more quality for the American market. We won’t notice.

    • 0 avatar
      brettc

      Back to rear drums and the 2.slow for the lazy Americans.

    • 0 avatar
      orenwolf

      I’m actually amazed that the decontenting strategy worked as well as it did. I suppose there are vastly more base-level buyers out there than I’d realized.

      • 0 avatar
        CoreyDL

        I think initially it worked because people thought the quality would not decrease even though the equipment level had. Now they realize the product is actually worse.

        • 0 avatar
          Lorenzo

          Actually, it’s all about price. Americans will accept a certain level of shoddy workmanship and substandard materials if the price is low enough and the car keeps running with minimal maintenance. Unfortunately, Volkswagen couldn’t even meet that minimum standard.

          Say what you want about American makes, but they keep running despite their owners’ neglect, and the parts bin design philosophy makes those parts cheap when they have to be fixed.

      • 0 avatar

        The market really wants a $5k price point car. Look at all the folks who want a “honda’ or “toyota” (buzzword for reliable box) used. OK, maybe a 10k car, if it had airbags, a/c, and bluetooth.

        We obsess about dial gages in a luxury car (ats) but most folks want cheap + never breaks. (the reddit “just rolled into the shop” is a great reality check…and they want to pay you over time after the job is done, per many of my local shop owners.

        A friend asked me the other day about a $3k used 90’s honda for his kid. I sent him to a website with the advice “that is the official car of the local underclass” so he’ll have slim pickings.

        I enjoy playing with the B/B but the level at which most of the market engages with their cars is “appliance user”, maybe “stupid appliance user”….

    • 0 avatar
      redliner

      What really gets me is the decontented lighting options for the USA. I consider good lighting to be a safety requirement. You want HIDs on your Passat? LEDs? Never mind that LEDs are standard on a Corolla, can I interest you in these abysmal halogens instead?

  • avatar
    d4rksabre

    How about Strategy 2016? The strategy where VW gives me money and takes my car back so I don’t have to deal with this crap anymore. How about we get the ball rolling on that like…yesterday?

    • 0 avatar
      brettc

      You will wait another month for the news and 6 months for the actual buyback process. And you will like it!

      • 0 avatar

        There is no actual buyback process. They will delay, delay, delay, all the while the cars subject to buyback will decrease in value. The longer they delay the buyback the more money they save.

        I am sure they know how many of the subject cars are randomly wrecked, like mine, and how many miles the others are taking-they have the data base. I don’t have numbers, but you can assume each month they delay could save millions.

        I expect a lot of bla bla bla, then hagging “well, the car has 100k miles, it is worth two shoelaces and a warm beer.” I’m sure that the corporate decision is anything BUT a buyback.

  • avatar
    28-Cars-Later

    That’s right because *this* is the darkest chapter of this company’s history /s.

  • avatar
    brettc

    VW partnered with Daimler in the mid-aughts with Bluetec, but then said LOL JK and went off on their own with their own emission control strategy on the TDIs. We all know how that turned out.

    Very strange that the plan will be unveiled in a month. That also corresponds with their June 21 TDI court date. Maybe they are planning to take good care of their existing TDI customers with a mind-blowing buyback offer and they know their new strategy will do great as a result. But probably not.

  • avatar
    jjster6

    Emissions scandal…darkest chapter? Have we forgotten about 1939 to 1945?

    • 0 avatar
      5280thinair

      People have really short memories. For the last three American presidents running, I’ve had people earnestly tell me this is the worst president ever hands down. Ask them about Garfield, Buchanan, or Harding and they give you a blank look.

      • 0 avatar

        Harding does make for some pretty interesting reading in history books.

      • 0 avatar
        Davekaybsc

        Andrew Johnson will always be the worst. His policies lead directly to 100 years of Jim Crow. Neither GW or Obama depending on which side of the ideological fence you happen to sit on can touch that.

      • 0 avatar
        Whatnext

        Garfield was President? Well I guess if Trump can run, why not a cat. America, what a country!

        • 0 avatar
          28-Cars-Later

          I’ve vote for him now.

          Garfield/Odie 2016: All your lasagna are belong to us, America.

        • 0 avatar
          Lorenzo

          That was another Garfield, and you can hardly blame him for anything since he was in office for only 6 months, the last two in a hospital after being shot. You can blame him for Chester Arthur, his Veep. @5280thinair was probably thinking of Grant, who was personally honorable but surrounded himself with crooks.

          • 0 avatar
            CoreyDL

            Wasn’t Grant a big drunk?

          • 0 avatar
            28-Cars-Later

            Martin Van Buren FTW.

          • 0 avatar
            Kenmore

            “Wasn’t Grant a big drunk?”

            Very hard to say because his rapid rise up Army ranks and Lincoln’s unstinting support of him drew such a swarm of supremely skillful character assassins with both military and political agenda that, yeah, all kinds of hyperbolic accusations to that effect were made. And that kind of jaundiced scrutiny certainly didn’t diminish when he became President.

            He probably tied on an epic bender or three as did any other officer fighting that war or serving at the vastly isolated frontier posts he was earlier assigned. Personally I don’t think drink ever determined his major decisions or lack of same.

          • 0 avatar
            CoreyDL

            Nice history lesson, thanks.

          • 0 avatar
            28-Cars-Later

            Kenmore, the history buff.

          • 0 avatar
            Kenmore

            Thanks for Grango and Corey on Clothes!

            History is just yesteryear’s business news.

          • 0 avatar
            CoreyDL

            “I could talk about men’s fashion and industrialization all day but I’m afraid work must intrude…”

            -Hans

      • 0 avatar
        "scarey"

        Maybe Angela Merkel should give the EPA a reset button…Remember Hillary Clinton giving the Russians a ‘reset’ button ? How did THAT work out for BHO ? …oh, wait !

      • 0 avatar
        Superdessucke

        Garfield was awful. I’m amazed we got through that. I shudder to even remember that era.

    • 0 avatar
      JimZ

      EVERYONE WAS ON VACATION!

  • avatar
    Davekaybsc

    Strategy 2025: even cheaper plastic in the Jetta. 2″ Nav screen. Torsion beam rear axles in everything. That’ll sell ’em!

    The 2002 Altima brought Nissan back from the brink with just about the lowest quality interior imaginable, but it was a fun car when literally everything it competed against, including the Mazda 626, was a bland snoozebox, and that 3.5 V6 was faster than anybody else.

    VW doesn’t have that luxury. Nobody is going to sit and wait for them until they FINALLY introduce a remotely competitive Tiguan, or something larger that isn’t stupidly expensive like the Toureg.

    Then there’s that thing were they keep saying “this time the quality is good!” and then it turns out that the quality is in fact not good.

    Audi has been getting podium or near podium finishes in CR reliability surveys for the last several years running. Audi, the company that was pretty much synonymous with “shop queen,” now makes some of the most reliable cars on the road. You maybe might want to call them up and ask them how they are doing that, and then maybe copy it.

  • avatar
    jpolicke

    “Hmmm, let me see if I get this straight…you’re saying if we make our money selling things to people, we should make things that people want to buy?? Whoa, that’s radical thinking.” How many German MBAs did it take to produce that pearl of wisdom?

    One correction to the article: over the last 8 months, VW has been anything but boring.

  • avatar
    NickS

    They need to look forward, really forward. Electrification strategy because they eventully will have to, if they want to have hearts and minds.

    The North American market is a lot of things, not just CUVs for everyone/everywhere (yeah, better margin and all that … whatever). In urban settings small mini-cars are an untapped need waiting for someone to offer small electrics at a low price point. Not everyone can have access to a full-size parking space in most cities. Couple that with a few free uses of a CUV per year, or some joint venture with a car share. Heck, build a vehicle designed exclusively for that type of shared use/service.

    The big challenge for OEMs: emissions. True way back in the late 90s. Still is, and will definitely continue to be much more so. In a month from now if they don’t show a strategy that fully embraces that *reality* or shows seriousness about a swift move in that direction, they will become irrelevant. Building Tuaregs is just moving metal keeping the lights on.

    Mobility … uuummm, okay. It’s nice long term to think about that and remain relevant but they cannot play like the big tech firms.

    • 0 avatar
      jpolicke

      If mini-cars were in such demand Smart, Fiat 500, Spark, etc would be flying out the door.

      The original concept for the VW was based on a radical strategy. When most cars had water-cooled engines in front driving the rear wheels they came up with a rear engine car with air cooling. Clever packaging maximized space while keeping overall dimensions compact. Simple, basic, relatively RELIABLE for its day, AFFORDABLE. Not necessarily tiny. Maybe a range of electric CUVs & sedans would succeed here. I doubt if it’s worth the investment just for the NA market.

      • 0 avatar
        NickS

        I had those in mind when I wrote that. Would you classify any of these as low price cars?

        VW is just cash hungry granted, but the mini-car market is going to be there in the future. Cars flying out the door is a metric for desirable product now, not vision. That requires having a longer horizon. vw needs to show it has that because they have a track record of volume sales with no vision. Their idea of the future was diesel when everyone else saw the writing on the wall. Eventually, someone will need to deliver the small footprint putt-around-town 1-2 person pod. They will not be able to react fast enough when that market is there. Look at electrified drivetrains. Toyota has massive share, know-how, AND volume. VW has hopelessly few offerings in that space.

        I reckon VW is fixated on volume but whether they want to take the needed risks to have some place in a future reality is up for debate. Their track record doesn’t speak very well.

        Look at other OEMs that have some electrified presence. It’s a tiny part of their fleet but they are in there, in the game, slowly adding hybrids to their portfolio. Or with already a desirable BEV, i.e., Leaf. VW will NOT achieve volume ever by staying safe with ICE offerings. It will get even more expensive to build and own those as the decades roll by. See where I am going with this?

    • 0 avatar
      RobertRyan

      Become another Tesla? No they actually want to sell vehicles

    • 0 avatar
      Superdessucke

      VW is planing to zig when it should be planning to zag. In 2025, Americans will Not be buying CUVs. They’ll be car sharing and driving basic small econoboxes, mostly electrified or hybrid. But ok.

  • avatar
    here4aSammich

    “As part of its corporate makeover, the automaker will even consider partnering with other companies on some ventures.”

    Hmmmm, could this be the partner Sergio is looking for to build the replacement for the 200 and Dart? Plenty of capacity at the factory, and a partner would bring the cost of the new platform down. Say what you will, but it’s a better idea than a chinese built 200.

    • 0 avatar
      jpolicke

      Except the relations between Sergio and VW are toxic. When I got my Dodge in 2012 I got the extra $1000 FCA had put out for VW tradeins. Maybe after Sergio retires or Piech dies, but not now.

  • avatar
    namstrap

    Volkswagen has at least three electric cars in Europe that I know of:

    The eUp!
    The eGolf
    The ePassat

    I think there would be a good market for them here, if they imported them.

  • avatar
    tonycd

    It’s common in every era to assume the future will be very much like the present. In this case, midsized SUVs are emphatically not the future. They’re the present.

    The future will enforce energy efficiency that’s incompatible with a rolling tall box on wheels. Electrification will probably be part of the post-fossil fuel world. Poor aerodynamics and wasted pounds will not.

    • 0 avatar
      NickS

      This, 100%.

      CUVs are so today. Tomorrow will make them so yesterday.

      Everyone is obsessed with volume sales and what not. But some automakers like Toyota have achieved both volume and have gained so much more actual mass market experience with electrified powerplants already. And they have revised, refined and improved their original products several times over. And locked in suppliers and pipelines for future growth. And are more poised to meet increasingly more stringent regulations and fleet standards.

      VW is where along that trajectory? 1000 BEVs, PHEVs, or whatever with much smaller range, higher cost and lower reliability than their competition is practically a prototype.

  • avatar
    pdq

    “In a bid to boost revenues and salvage its formerly good name”

    Formerly good name? Seriously?

    You clearly have never owned a water cooled VW.

    • 0 avatar
      Lorenzo

      Volkswagen had a very good name worldwide, and almost so in America, land of missed oil changes, never changed wipers, “It’ll have to wait ’til I get my next check, if something else doesn’t come up”, and “I’ll ignore that sound until it stops running”. It’s astounding how poorly we Americans take care of the second most costly purchase of our lives.

      • 0 avatar

        Agreed. If you look at the ownership profile in Europe, your GTi is the cost of a 3 series for us. Distances driven are less. Operation costs are much, much higher….I went to an auto parts store in Germany when I was there last. 25 euro for a liter of oil ? Yes, because they include disposal costs too. How many liters is that …. wow.

        Euros also buy the car up front and own it….not with a note, usually or a lease. The car is used for weekends and holidays (ok, they get six weeks, not two weeks of STILL having to check email).

        You must own a car in most of the USA. You don’t need one in most of Europe.

        There is an assumption that you will keep the car up-check the oil…the state inspections are intrusive, and comprehensive, unlike my relative in Montana with a “permanent registration”.

        Do you know why maintenance is included in your luxury lease ? So the car will have seen two oil changes before the CPO sale. It isn’t for you. It is so they don’t get CPO folks outraged over their pre-sludged engine. The company is just protecting their asset. They KNOW that a fair percentage won’t even think to do it, much less for a car they are ‘giving back’.

      • 0 avatar
        Truckducken

        Yes, only the laziest of us lazy Americans seek out VW products, since after all there’s a dealership on every block. And it’s totally missed oil changes that make all those German-engineered window regulators, fuel injection components, and the rest of the inevitable reliability disasters happen to these incredibly well-built cars in a mere fraction of the time it takes those inferior Japanese, American or Korean cars to fail.

        Were you paid to make this comment?

  • avatar
    laserwizard

    Out goes the conservatively dressed scammers and liars and now they’ll wear party hats and clown shoes.

    Maybe Hillary Clinton will allow them to borrow one of her nuclear teal pant suits.

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