Forget Volkswagen's '800,000 Sales by 2018' Goal - VW's New Goal Is 5 Percent U.S. Market Share by 2020

Timothy Cain
by Timothy Cain
forget volkswagens 8216 800 000 sales by 2018 goal vws new goal is 5 percent u s

In 2009, during the depths of a global financial crisis the likes of which generations had never seen, Volkswagen of America set forth on a nine-year plan that would more than triple sales to 800,000 units in 2018.

Stuff happened. A crisis (or two) got in the way. An overly Americanized product lineup lacking in utility vehicles underachieved. Volkswagen lost its right to sell diesel models in America. Volkswagen will struggle to sell 400,000 new vehicles in the United States in 2018.

Although at first it seemed possible — Volkswagen sales grew far faster than the market as a whole exiting the recession — the 800,000-unit sales goal has long since been abandoned. By 2014, before the diesel emissions scandal even broke, now-departed Volkswagen of America CEO Michael Horn was questioning the timing of the 800,000-sales goal.

As the summer of 2017 approaches a close, however, Volkswagen’s global boss Herbert Diess has a new, seemingly unrealistic goal for the brand’s U.S. operations, Bloomberg reports. With a stronger SUV lineup, Volkswagen wants to grow its U.S. market share to 5 percent in 2020.

Volkswagen’s market share in 2017? Less than 2 percent.

Interestingly, 5 percent market share in the United States equals somewhere between 750,000 and 900,000 sales, depending on the strength of the market. In 2015, for example, Jeep claimed 5 percent market share with 872,908 sales. Jeep then grabbed 5.3 percent of 2016’s market with 926,376 sales. Through 2017’s first seven months, roughly 500,000 sales would be required for 5 percent market share.

Volkswagen sold 188,329 vehicles during 2017’s first seven months.

Of course, we’ve yet to see the real impact of Volkswagen’s new SUV strategy. Gone is a utility vehicle lineup that included the undersized Tiguan and outlandishly priced Touareg. The Touareg is discontinued in the U.S. market after the 2017 model year.

The first-gen Tiguan becomes the decontented, lower-priced, subcompact crossover-competing Tiguan Limited. In comes the all-new second-generation Tiguan with far more space and an available third row. That Tiguan serves as a follow-up to the properly large first-gen Atlas, Volkswagen’s first true competitor for the Ford Explorer and Toyota Highlander.

Yet on Volkswagen’s quest to add 2.5 times more market share over the next three years, the brand’s plan does not include the T-Roc — a true rival for the Honda HR-V, Buick Encore, and Jeep Renegade. While the U.S. market earns more than 40 percent of its sales from the SUV/crossover sector, Volkswagen currently produces only 14 percent of its U.S. sales from utility vehicles, a figure Herbert Diess expects to skyrocket in the next few years. Globally, Diess wants 40 percent of global Volkswagen sales to be SUV-derived.

There will be a new version of the Jetta, still Volkswagen’s best seller, next year. Volkswagen isn’t so foolish as to think the current-sized lineup will be sufficient to grow market share to 5 percent. But regardless of the size of the lineup, the number of SUVs, the affordability of cars, and the number of electric offerings, this level of growth would be a stunning achievement if actually accomplished.

Volkswagen has failed to do so in the past. It’s difficult to believe the company can do so now.

[Images: Volkswagen]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

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  • John Horner John Horner on Sep 03, 2017

    Even if VW somehow had the product mix to make that goal, it doesn't have the brand strength. I turned 18 in 1979, and VW has largely done everything possible to destroy brand value throughout my adult lifetime. Spotty quality, botched Pennsylvania factory which was eventually closed in desperation, horrible customer service when problems happen, arrogant Germany Knows Best management, lackluster advertising lurching from one theme to another, the worst emissions cheating scandal to date, and so on. Meanwhile, Hyundai and Kia have come out of nowhere to build stronger US brands than VW has. This is absurd considering how special and respected the VW brand was in 1970. Once upon a time VW had the best advertising in all of the car biz and was on a roll. They never responded to the rise of the Japanese makers, the rise of the Korean makers and the modest recovery of GM and Ford. It blows my mind that VW can be so successful in other markets while almost always getting it wrong in the US.

  • Xflowgolf Xflowgolf on Sep 05, 2017

    while they don't have a mini-CUV directly, they have introduced the AWD Jetta (or Golf?) AllTrak which is basically a cheater way into the segment. Add plastic and slight lift to your wagon, ala Subaru, and pretend you have another CUV.

  • YellowDuck Thank goodness neither one had their feet up on the dash....
  • Zerofoo I learned a long time ago to never buy a heavily modified vehicle. Far too many people lack the necessary mechanical engineering skills to know when they've screwed something up.
  • Zerofoo I was part of this industry during my college years. We built many, many cars for "street pharmacists" that sounded like this.Excessive car audio systems are kind of like 800 HP engines. Completely unnecessary, but a hell of a lot of fun.
  • DedBull In it to win it!
  • Wolfwagen IIRC I remember reading somewhere that the Porsche Cayenne was supposed to have a small gasoline-powered block heater. There was a loop in the cooling system that ran to the heater and when the temperature got to a certain point (0°C)the vehicle's control unit would activate the heater. I dont know if this was a concept or if it ever made it into production.
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