VW Lowers Prices in US and Repositions Brand for More Growth

VW Lowers Prices in US and Repositions Brand for More Growth
Reeling from unsuccessful attempts to move upmarket, Volkswagen of America Inc. is lowering prices to reposition the brand.

In the 2007 model year, VW will have three vehicles priced below $18,000. Last year, only the aging Golf was in that range. Its replacement, renamed the Rabbit, has a base price of $15,620 including shipping.

Prices on other 2007 models also have been lowered (see box).

Matthias Seidl, COO of VWoA, says the strategy reflects the brand's repositioning as "affordable German engineering."

"Some might argue we have left the affordability side of the equation," Seidl says. "This is proof that is not our strategic intent."


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S4cabriofoxoneS4cabriofoxone - 1/9/2007 11:27:41 PM
+1 Boost
I agree.

VWs are great, but they should be "stepping stones" for Audi- not competition for Audi. Because, sadly enough, VW has faced the truth- in the luxury market, Audi, and almost all others, will beat them.


StartupRacingStartupRacing - 1/9/2007 2:26:55 PM
+1 Boost
I think this makes sense, unless they want to bring Seat or Skoda here.


Agent009Agent009 - 1/9/2007 2:42:10 PM
+1 Boost
Makes a lot of sense. They don't have near the clout in the US as in Europe. Different rules apply.


MercBasherMercBasher - 1/9/2007 3:05:25 PM
+4 Boost
Considering the weakness of the dollar [and strength of the EURO] it seems like this will further increase the gap in prices between US and Europe. Can VW really be making any money in the US market?

Would VW have to cut prices in the US if its quality / reliability were not so shockingly appalling?


SixxFiveSixxFive - 1/9/2007 8:14:45 PM
+1 Boost
VW has not made a profit in the US since 2002. When Porsche takes over the business aspect of VW Group, hopefully they will return to profit.


chewychewy - 1/9/2007 11:14:02 PM
+1 Boost
Old news, these VWs with lower prices have been on sale for like 3 month already.


JUGNUJUGNU - 1/10/2007 3:36:30 AM
+1 Boost
BTW is it good for a manufacture to decrease it's prices?I mean business and marketing point of view.

Instead They should keep the prices same for more period of time,say like 2-3 years.But going downward reflects the company.


JUGNU



XYZZXYZZ - 1/10/2007 7:06:14 AM
+1 Boost
well, the big 2.5 were doing this for YEARS with rebates and incentives. but you are right, this WAS NOT good for them, and they resorted to just lowering the sticker prices.

maybe vw has learned from their example.


S4cabriofoxoneS4cabriofoxone - 1/10/2007 6:49:36 PM
+1 Boost
The difference is, VW makes a great product. They're durable, stylish, of high quality and very fun to drive. The only thing the Big 2.5 could've claimed was durability.

The American public just doesn't really realize it.

If VW stopped making US-bound cars in Mexico (or shifted them to the European plants, or even started a US plant), then the reliability problem would be solved. Europeans put VWs at the top of their lists in terms of reliability- theirs are the cars that are made in Europe. The Mexican-made cars are the ones with $hitty reliability. It would cost a lot to fix this, but it would help VW greatly in the long run, mostly through word of mouth that they had great reliability.


XYZZXYZZ - 1/11/2007 3:23:06 AM
+1 Boost
LOL!

of course, if vw built cars in japan, it would throw their COSTS and profits equations even more out of whack!

maybe they could try korea?

and S4 is wrong. even in europe, vws are NOT that reliable. even german auto magazines/surveys put JAPANESE brands (including suzuki!) at the top tiers of reliability.

the german prestige brands rank higher in desireability (as aspirational vehicles), but even THOSE rank BELOW the japanese.

the only reason vws do well there, is 'cuz thry're CHEAP. and have the 'chevys of europe' for over half a century.


XYZZXYZZ - 1/11/2007 3:28:07 AM
+1 Boost
that is, "have been..."


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