Is VW Relevant In Today's NORTH AMERICAN Market...???

With annual sales BELOW what Oldsmobile was when GM axed them and just ahead of Mercury's all time low numbers, VW is desperately seeking to stay relevant in todays market... With quality problems and one of the industries horrible reliability rankings, VW is looking hard at finding a way to grow numbers and stay here State Side...

Here is a great short story on their facing problems and what they are looking to do to fix them...


Despite struggles, VW sets bar high for sales in U.S.
Sunday, September 16, 2007Joe Guy CollierDetroit Free Press
Despite years of sliding U.S. sales for Volkswagen, the company is optimistic the brand can hit annual U.S. sales of a half-million vehicles within five years.

Adrian Hallmark, Volkswagen of America executive vice president, said he's pushing hard for the German automaker to build a new assembly plant in North America.

If successful, it will mark a dramatic turnaround for Volkswagen. Europe's largest automaker has been struggling to find traction in the United States, leading some to question whether it can compete in this country.

The German company announced Sept. 5 that it was pulling its North America headquarters out of Auburn Hills, Mich., and moving to Herndon, Va. About 900 of Volkswagen of America's 2,000 U.S. employees are based in Auburn Hills.

In a recent interview with the Detroit Free Press, Hallmark said Volkswagen is committed to the U.S. market. Volkswagen's North America unit has lost about $4 billion over the past four years.

"If you'd lost a billion or two over a couple of years, you'd think twice," said Hallmark, a former Bentley and Porsche executive who came to Volkswagen of America two years ago. "But if you want to be a global volume player, how can you not be in the biggest global market?"

Volkswagen will retain some presence in Auburn Hills and is assessing its North American operations, including the possibility of building a new assembly plant.

"If there ever were a factory investment, then you'd definitely want to look at where that is and put some administrative support there," Hallmark said. "If we invest and expand, that's good news, but how it will look - not yet determined."

Volkswagen's assessment of its role in the United States comes at a crucial time for the company. Quirky vehicles like the Beetle and Microbus struck a chord with U.S. consumers in the 1960s.

The fuel-efficient Rabbit hatchback gave Volkswagen reason to believe mass-market growth was ahead. The German automaker opened an assembly plant in New Stanton, Pa., in 1978

nybimmer - 10/3/2007 10:04:29 AM

+8 Boost

Although I do like their products, their unfortunately is no room in the US market for a non-premium Euro brand. Don't flame me..but Peugeot, Renault, and even Rover/British Leyland figured this out a long time ago.

VW's products are not competitive on a cost basis; the product design/content does not resonate within the 'bell-curve' of most middle-market US consumers; it has become worse than a 'me-too' product - it's a 'why buy this?' product. Sorry to be harsh but the invisible hand of the marketplace has spoken.

Herr Piech was correct in trying to move upmarket with the brand - but its unfortuately too little, too late.

I95SPEEDINGTICKETS - 10/3/2007 10:19:12 AM

+3 Boost

Yep

I were in charge of VW i would pull out of the NA market and focus on China & India.

I95SPEEDINGTICKETS - 10/3/2007 10:19:55 AM

+2 Boost

Let AUDI worry about the USA market.

Larry - 10/3/2007 11:38:21 AM

+4 Boost

i think they are relevant, VW has talent but i think invest too much in chasing BMW and Mercedes with the Phateon, Bentley , Bugatti etc. instead of focusing on their core products first like Toyota and Honda, there was a time when VW dominated the compact market with the VW Bug, they can do it again.

MeanVulcan - 10/3/2007 12:26:36 PM

+2 Boost

I could not agree more. Their styling is already better than Toyota and Honda IMO and so is the interiors. They should be competing directly with these brands and focusing on improving their reliability.

S4cabriofoxone - 10/4/2007 2:38:56 AM

+1 Boost

Beyond their styling and interiors- their major selling point is the driving appeal! They are great to drive! So much better than any Toyota!

I hope they get their NA plant underway... it could finally be the thing that shoves them into overdrive in the US market.

mini22 - 10/3/2007 12:01:52 PM

+4 Boost

The big mistake was not having a US factory with at least 75% US content.VW products are simply over priced due to the currency imbalance. VW was never an upscale market company to compete with BMW and Mercedes. Thats the job of Audi. VW has to keep ALL it's products in the $20 grand range if they are to compete with the Japanese and Koreans. This can only be done with a US factory at this point.Audi at one point should look at a US factory as well and follow BMW and Mercedes lead.This is the reality if Europe wants to compete in the US market. However this is especially important for VW. Beyond that VW's styling has to be a little more exciting. What works in Europe does not necessarily work here.Not bringing in the Sirroco(especially the convertable) is a mistake.It could really be a halo sports car for VW and in convertable form and would not take sales away from the GTI.The Passat coupe should not be brought in.It will probably cost 40 grand in the US. That is simply too much for a VW.I would restyle the Beetle by making it lower and giving it more Porsche 356 cues,make the Rabbit/Golf more aggressive looking,make the Passat slightly larger(longer and wider).Above all build these cars in the USA including engine parts.If VW has any powers of observation the can see the success of Japan and Korea.All they have to do is start emulating them,and watch their quality control. By taking these steps they will acheive success in North America.

rok_altima - 10/3/2007 12:34:49 PM

+1 Boost

The majority of VWs sold in the North American market are built in Mexico...where the labor costs are even less than in the United States, it really doesn't have much to do with the exchange rate.

Htay7500 - 10/3/2007 4:22:25 PM

+2 Boost

the passat and its wgn as well as the gti and touareg are built in Germany. Germany uses the euro, and the Euro is much stronger than the USD.

S4cabriofoxone - 10/4/2007 2:42:49 AM

+1 Boost

So that leaves the Jetta, Rabbit, New Beetle and EOS. None of them are overpriced- and the Jetta and Rabbit sell well, which makes sense. But the rest of them (besides the inexpensive GTI) suffer from the exchange rate. The Passat is in a strange position, where it's more upscale than a Camry, more interesting than an Avalon and not has high-end as a 3 Series or A4. Most people, however, would compare it to a Camry or Accord. Because it is expensive, the Passat loses. Also, the Touareg is a bit overpriced- not the car itself, but as a VW. Standing alone, it's a very well-executed SUV that's worth $45K with the right features. But not with that badge... that's Q7 territory.

M35MT - 10/3/2007 12:40:10 PM

0 Boost

Most true VW fans only want to drive the 'real' GTI's from the 80's.

And the current gen Jetta lost its euro-flare that made the previous one so popular.

Htay7500 - 10/3/2007 3:17:46 PM

+2 Boost

I don't find the jetta nor the GLI attractive at all. the last jetta looked cool, away from others. apparently, the current one looks like a tweaked corolla. the GTI is the only VW to consider for me.
but I can't consider one if they aren't able enough with the likes of Honda and toyota.

Star - 10/3/2007 3:51:17 PM

+1 Boost

"but I can't consider one if they aren't able enough with the likes of Honda and toyota. "

Toyota doesn't have anything that competes with the GTI and Honda has a cheap looking, underpowered POS Civic SI that is not half the car the GTI is. A Honda SI in Europe is sold for a lot less than a GTI while in America for only 1000 dollars more than an SI you can get the VW GTI. Only the xenon lights(standard on the GTI) make up for that difference while the overall quality of the GTI puts that tin can called SI to shame. VW priced their vehicles lowest in the world for the American market. To say that they are overpriced is INSANE. Some of the people on this site have absolutely no clue in judging the quality of cars, prices and so on. Is quite disappointing to hear this people claiming that they are car enthusiasts.

Htay7500 - 10/3/2007 4:18:32 PM

+1 Boost

"VW priced their vehicles lowest in the world for the American market."

lol, really? then why don't they have a US plant here?

M35MT - 10/3/2007 4:19:39 PM

0 Boost

Star, that was uncalled for.

You need to get your facts straight. The true VW fans in this country lost interest when VW 'attempted' to go upmarket.

The current Jetta looks like the German rendition of a Carolla. It's sad. The previous gen looked great.

Their quality control issues have NOT been resolved.

Htay7500 - 10/3/2007 4:32:08 PM

-1 Boost

VW is only great in the EU, where its market is TOTALLY different than anywhere else.

S4cabriofoxone - 10/4/2007 2:45:08 AM

+1 Boost

"You need to get your facts straight. The true VW fans in this country lost interest when VW 'attempted' to go upmarket."

No they didn't. You don't just "lose interest" because of a car like the Phaeton- if anything, it gets you more interested. Their core products are still there.

And anyway, I agree with you on the Jetta being a step backwards, but the GTI is a huge improvement and definitely worth a look by anyone at any age.

Star - 10/3/2007 3:57:46 PM

+2 Boost

VW builds amazing driver's cars. A ride in a GTI or R32 will leave you with a permanent grin on your face. German engineering at its best..that's what a VW is...pure unadultered pleasure. Of course for the ones that want more luxury there is always BMW and Mercedes.

david999 - 10/3/2007 1:03:28 PM

+4 Boost

Reliability problems and price have killed VW in North America. It was what drove Fiat out. VW should build a plant in North America to help address quality concerns, and slash prices to try and get back market share.

Star - 10/3/2007 4:02:41 PM

-1 Boost

Consumer Reports and the stupidity of the car buyer is what hurt(not killed) VW in America. It must be something wrong when the first choice of car in Europe gets pushed toward the bottom of the list in America. Let's thank Consumer Reports for brainwashing millions of people into buying the garbage from Honda and Toyota.

Designer1 - 10/3/2007 4:20:18 PM

+1 Boost

Hmm, well lets see this. If Honda and Toyota were garbage, why are they so successful through out the world? What makes Toyota the more profitable car company in the world? What makes the European companies fear them?

If your answer is, consumer reports brainwashed millions, then kiddo you'll get an F, and that means you can't accept reality, and bud in that case you need help to come out of your conspiracy ideology. :-)

S4cabriofoxone - 10/4/2007 2:46:53 AM

+1 Boost

I agree, david. An NA factory would solve both of those problems! It makes too much sense to ignore.

Lexus - 10/3/2007 4:14:39 PM

+4 Boost

I really VW has the money and engineer to become a force to reckon with in North American market. Look the at the Kia/Hyundai brand, they're make horrible and hideous cars and look how successful they has become. Note, Kia/Hyundai has also improving their quality and reliability as well.

So yes VW can do it, if they focus on one goal at a time, taking on Toyota, Honda, Nissan, and the American brands. Instead of jumping or chasing everyone at the same time.

S4cabriofoxone - 10/4/2007 2:48:19 AM

+1 Boost

I agree! No more "toy" VW projects! They have to focus on their core vehicles- and perfect them. Make the Beetle cool again! REDESIGN THE JETTA NOW! Make the Touareg less-expensive... by making it a seven-seat Tiguan! Keep the Rabbit and GTI the way they are. That's what I have to say for now.

Designer1 - 10/3/2007 4:24:02 PM

0 Boost

I think quality of VW and reliability made it loose track. And I'm sure in the future the Japanese brands will overcome the European market as well. Look around you, the only continent that the Japanese brands hasn't overthrown the rest is Europe and even that is changing year after year.

The reason is very simple, to succeed make a better product that lasts, and you're the winner.

Lexus - 10/3/2007 6:07:05 PM

+1 Boost

And another thing that I might add the newer and younger generation usually had a different taste for car. But yes better products definitely will give you a huge advantage over your rival company.

Star - 10/3/2007 8:29:50 PM

+3 Boost

VW is an extremely successful car company. The only place where they have problems is America and if we take in consideration how little people know about cars here, it is not surprising that garbage like Toyota or Honda sell better. These almost retarded advices coming from Japanese car fanatics regarding quality addressed to a car manufacturer like VW, number 1 in Europe is beyond ridiculous. VW already makes much better cars than Toyota and Honda and the rest of the world knows it, all it takes is for the gullible American consumer to become more knowledgeable when it comes to cars and realise that doing what Consumer Reports tells them to do might not be in their best interest.

mini22 - 10/4/2007 12:39:30 AM

+2 Boost

Star and Rock-Look the Passat is not built in Puebla. Of the cars built in Puebla the Beetle has scored very poorly regarding the number of problems per vehicle. In fact quality control has been a definate problem with VW. Another is styling. VW has very conservative stodgy styling. A Civic may not be a better car to drive but it is way more attractive then the Rabbit.A well equipped GTI costs nearly 30 grand. The R32 is what 32 to 33 grand. A Passat 4 cylinder costs what a v6 Camry and Accord run. Plan and simple due to the exchange rate and quality control a Puebla VW sales in the US have tanked. VW should have separate styling for the US plus a plant in the US to control currency and quality. The Sirocco should be produced at a US plant. VW needs to do these things or they might as well pack up and go back to Germany. What ever they have been doing in the recent past is just plain wrong for North America.

S4cabriofoxone - 10/4/2007 2:51:13 AM

+1 Boost

"VW has very conservative stodgy styling. A Civic may not be a better car to drive but it is way more attractive then the Rabbit."

Actually, I completely disagree. I feel that the Rabbit/GTI is their most stylish model (besides EOS, which doesn't really count). It has a perfectly proportioned Euro look, very timeless, like the last-gen Jetta. The GTI takes it a step further with more adventurous details. The Civic, while I respect it for its competence, looks like a Prius came out of a trash compactor.