By on September 30, 2016

2015 Volkswagen Golf family, Image: Volkswagen of America

After the awkward auto show apologies of the past year, Volkswagen executives are looking forward to a rosy time in the near future after the brand stabilizes itself.

Those “good times” will return, according to global brand chief Herbert Diess, but not before three to four years of rough slogging. In a Bloomberg TV interview from the Paris Auto Show, Diess mulled adding new models to its U.S. lineup.

The executive predicts that Volkswagen should be “finished the hard work” of restructuring its operations by 2020.

That task includes bringing employee compensation and pensions under control, settling all fines, lawsuits, recalls and buybacks spawned by the diesel emissions scandal, rolling out a crop of electric vehicles and boosting production of profitable models, especially in the U.S. The automaker might also position its foray into mobility services like ride-hailing and self-driving shuttles into a new brand.

Easy peasy.

Volkswagen introduced its I.D. concept at the Paris show, promising a long-range electric compact by 2020. The vehicle offers up to 373 miles of range and would slot alongside the gas-powered Golf in the brand’s lineup.

Though the brand touts electrics as the future of driving, the transition away from fossil fuels puts the company in a fair bit of financial peril. According to Bloomberg, the company’s operating margin sits at a very low 1.7 percent. The switch-over to EVs would eat up cash through costly retooling and training, potentially lowering profit margins.

Potentially offsetting that, the automaker is considering bringing new models to the U.S. to bolster its recovery plan. While the Teramont midsize SUV and lengthened Tiguan bow next year, it might not be enough. Automotive News reports that the company will decide whether to add new U.S. models (likely crossovers or SUVs) by early next year.

[Image: Volkswagen of America]

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31 Comments on “‘Good Times’ Return for Volkswagen Around 2020, Diess Predicts...”


  • avatar
    threeer

    Sell more crossovers here and price them competitively. They are fine the rest of the world over (the term “too big to fail” comes to mind, especially in their Heimat). Car sales, in general, are diminishing as more and more Americans turn to SUVs/CUVs to begin with. They can continue to sell Polos and Golfs in every other country without issue, so even though the financial hit they are about to take is substantial, they’ll recover and be fine. Maybe even before 2020.

  • avatar

    You hear that, dealers? They screwed you over, but you guys only have to make it through another three or four years before things turn around. Break out the beer and chicken wings, fellas!

    • 0 avatar
      brettc

      I’m sure the standalone VW dealers are super excited to hear this news.

      At least 4 more years of cost cutting is what the proclaimation means to me. Not likely that I’ll replace my TDI with another VW. Other manufacturers have much more appealing vehicles that probably won’t crap the bed before 10 years is up, and those other manufacturers are way ahead of VW in electric and hybrid systems.

    • 0 avatar

      My brother in-law got a screaming deal on a GTI last year pre-scandal (the gas-powered turbo model). It’s a great little car, but I always wonder if it’ll be a good long-term companion.

      • 0 avatar
        SCE to AUX

        He should trade it before 3 years or 36k miles, whichever comes first.

        • 0 avatar
          LeeK

          Oh for crying out loud. When is this “all VWs blow up after the warranty ends” meme going to end?

          My 2010 GTI has had ONE issue out of warranty, a Check Engine Light that required an intake manifold sensor to be replaced. Not only that, but my dealer replaced it for free due to a hidden warranty on the part.

          This isn’t 2005 anymore. The Mark VI and VII Golf series are marked improved over the bad old Mark IV days. Look at long term reliability stats from Consumer Reports and True Delta rather than rely on internet car forum warnings of impending doom. In CR’s April issue, VW as a brand is number 12 out of 28. Audi is number 5.

          Yeah, VWs were unreliable in the 2000s. That is statistically not the case anymore, and I can verify it with my own personal experience by owning five VWs in the past ten years. My three Hondas (kids cars) have caused me more grief and expense. I’ve dropped $6,000 into repairs on just one Element.

          • 0 avatar
            SCE to AUX

            Unfortunately, I can’t afford to keep returning to the poisoned well every few years to see if it’s better. Mfrs don’t realize – or don’t care – that one bad experience can turn a consumer away for a generation.

            I had a once-and-done bad ownership experience with an 02 VW and an 05 Honda. I bought the VW after my research back then showed they were reliable, and statistics will show that Hondas are wonderful.

            Why don’t you try Kia? Mine have been good.

    • 0 avatar

      LeeK, I say the same thing around here when folks bash Hyundai and Kia so readily, but even I have to admit that it’s somewhat understandable. The bottom line is the public is very gun shy, and reps stick a long time, fair or not.

      • 0 avatar
        notwhoithink

        “The bottom line is the public is very gun shy, and reps stick a long time, fair or not.”

        That’s the only real issue with Hyundai and Kia, unless you’re a fan of resale value. They had a run of subpar products when they first entered the US market and despite their reliability and customer satisfaction numbers being very competitive in more recent years (strongly competing against Honda), they’re still seen as cheap junk.

      • 0 avatar
        LeeK

        Yes agree Mthreeve, Volkswagen has a lot to answer for their miserable record in the 1990s and early 2000s. It will take another generation for people to even consider a VW again, and when they continue to shoot themselves in the foot with the diesel scandal or the appalling lack of a competitive CUV, there isn’t much hope.

    • 0 avatar
      Tosh

      I’d pop down and test drive a VW if there was beer n wings.

  • avatar
    White Shadow

    I purchased a 2016 Audi a few months ago and I’m quite certain that the scandal helped me get the deal I got. Slow sales always seems to motivate dealers to negotiate harder than usual.

  • avatar
    CoreyDL

    “Volkswagen should be “finished the hard work””

    Written in 100% Pure Canadian! Ha.

  • avatar
    CoreyDL

    The problem is that 2020 is also the return year of Alfa Romeo, and their 400,000 sales annually will be taking quite a few from good old VW.

    • 0 avatar
      Lichtronamo

      You’re joking right? The target date for Alfa has been delayed for years already and they’ll never make a serious return to the US with a strategy of taking on Audi. The only automaker with more problems right now than VW is FCA, which to stay afloat is entirely dependent upon the US market demand for RAM and Jeep .

  • avatar
    cgjeep

    Wow, need to change the name of this site to TTAVW.

    • 0 avatar
      RobertRyan

      @jgeep
      Agreed. You are No 1 Globally, but your world is going to end, according to TTAC.,I guess No 2 and 3 are now going to jump of a cliff as well as they see their efforts as fruitless

  • avatar
    lon888

    Tell him to get rid of it before the warranty runs out. I’ve got a 2012 GTI and I have already sunk over $3000 in repairs and parts and the car only has 90K on the clock. Its times like this when I miss my Hondas…

    • 0 avatar
      CoreyDL

      See above, where LeeK has STATISTICALLY PROVED VIA 5 CARS that VW is reliable.

      • 0 avatar
        5280thinair

        I don’t think they’re as bad as they used to be. My 2010 Jetta TDI has only had two small problems since new (rattling seat belt buckle, and issues with the center rear armrest folding down), a coworker has had no problems of note with his Jetta Sportwagon of the same vintage, and Steve Lang’s Long Term Quality Index seems to indicate VW has gotten on top of the power train issues that plagued them through much of the nineties and the aughts. Still, I doubt they’re going to be giving Toyota a run for their money in overall reliability any time soon. Also, with the specter of the High Pressure Fuel Pump diesel failures still out there (which can trash the entire engine) I’ve signed up to take the TDI buyback and don’t think it very likely another VW will be the replacement. My experience has been good, but too many others have had a lot of problems.

        That, and the fact the current Jetta strikes me as one of the blandest designs possible.

      • 0 avatar
        LeeK

        Snark much, Corey? It’s not me, dude: check the brand reliability stats from Consumer Reports and True Delta.

        • 0 avatar
          CoreyDL

          “Yeah, VWs were unreliable in the 2000s. That is statistically not the case anymore, and I can verify it with my own personal experience by owning five VWs in the past ten years.”

          If you don’t mean something, don’t say it. ;)
          You provided statistical verification.

          • 0 avatar
            JD23

            To be fair, nearly all of the people in this thread arguing that VWs are still unreliable are using 10-15 year old data with a sample size of one.

  • avatar
    wsn

    Face it, VW is not a competitive company in terms of car technology or productivity. Its relative success in the past decades is mostly attributed to it’s business vision in early entry into new markets such as China (and USA prior to that). Once the new market knows what VW really is, VW’s market share would drop with no turning back (again in both USA and China).

    Thus, in the next few years, VW would really need to break into new markets such as India or certain African nations to survive.

    • 0 avatar
      RobertRyan

      @WSN
      Doing a very good job surviving at the moment. VW does not mean just VW cars

    • 0 avatar
      tedward

      I’d strongly agree on the productivity criticism and just as strongly disagree on the technology side (even with tdi as an obvious good example for you). VW has all the tech pieces they need and they don’t have legacy clutter to deal with at the same time. This isn’t due to corporate vision so much as their position as a huge first world operator that only has a teeny weeny presence in our market.

      On the productivity side though…wow could they use that restructuring they are always talking about. It’s basically a case of GM 80’s through 00’s corporate bloat and red tape rigidity being applied across an ocean, with a side helping of all the stereotypical German culture management weaknesses that you can possibly combine in one entity. The tdi decisions, the lack of response to new vehicle segment openings, the mkiv and v era passing of reliability costs to owners, the refusal to conform to our hierarchy of brand positioning and price, these are all A+ examples of poor management decisions made at a serious remove. The irony to me is that just as VW US started to break away from some of those constraints (2010, changing price points and handling of reliability issues namely) they’ve continued to be plagued by the consequences of previous decisions made by the Germans ever since.

  • avatar
    stuki

    Good things will continue to happen in the future, and only in the future, for as long as selling elevator pitches to dunces and hypesters with free access to unlimited funds, remain more important to ones share price, than bothering to build decent product for decent prices. As opposed to the former, the latter is actually hard.

  • avatar
    HotPotato

    So does this squelch or fan speculation that VW is bringing Skoda to the US? :-)

    You could describe a Skoda as a VW but bigger, cheaper, and not quite as nice. You could describe the cost-cut, US-market Jetta and Passat the very same way. I wandered through my local VW dealer the other day and there was a Jetta, a Passat, and a Golf parked next to each other…and all three were priced almost identically!


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