Why Does Volkswagen Dominate Around the Globe And Fail So Miserably In The US?

Volkswagen’s namesake brand had very ambitious goals for the US market, which has been continuously rising since the dreaded days of 2009’s economic crisis.

But, the unfortunate and ambitious goals were tantalizing close – yet almost impossible to achieve, with the German automaker among the few to incur sales losses last year. Back in 2007, the carmaker wanted to see its US brand sales up to 800,000 vehicles a year by 2018. Not to mention that many industry experts said the goal was unobtainable, but the marquee also had to triple its sales figures. Steadily and methodically Volkswagen looked almost ready to turn any skeptic into a believer – it had an affordable, Mexico-built Jetta and also constructed a plant in Chattanooga, Tennessee to produce a US-tailored version of the Passat midsize sedan. Between 2009 and 2012 the sales doubled in volume to around 440,000 units per year – and looked ready to achieve the 2018 threshold.
 

TheSteve - 1/27/2015 11:49:23 AM

+5 Boost

Just some *guesses* here, based on my beliefs ans understandings:

(1) VW's ride and feel is on the firm, sporting side, which is interpreted by many Americans as hard, harsh, and unyielding.

(2) In North America, VW's prices are above econoboxes, and yet they still have the econobox image and reputation in the public's mind. The VW brand has a long history of being affordable, no-nonsense, no glitz cars, and that's hard to shake.

(3) Although VW's interiors are styled pretty nicely, their exteriors are arguably staid. They also don't have a good reputation for initial quality (few initial defects), low failures, or low cost of maintenance and repairs, which makes the "above econobox" price tag hard to justify for many in North America.

(4) VW offers much more fuel efficient (and less powerful) engines in Europe than in North America. This could increase their appeal there, and not here.

Just *my* take on things.

mre30 - 1/27/2015 12:25:31 PM

+1 Boost

I think the sad reality is the whole VW group is sorely starved for cash resources (i.e. R&D cash to fund new platforms, engines, styling, etc).

Look at Bentley and the 12+ yr old W-12 it uses. Look at the ubiquitous 2.0T four that is literally in every car line in the VW group except for Porsche, Bentley, and Lambo. Look at the increasingly cheapo interiors. Finally look at this warmed over audi strategic plan that's lackluster at best.

Then couple that with VW's quest for "world sales domination" and you have a recipe for underinvestment as the R&D money is going out the door on incentives.

I think they need some management change at the top - Germany desperately needs to change its inheritance laws so the founding families of these companies need to get out and leave the management to professionals.

Oh, and they apparently never hold focus groups either - else why would VW's NA product line suck so much (GTI aside).

chewy - 1/27/2015 3:02:54 PM

+1 Boost

They aren't, they have billion upon billions of cash for R&D it's just for the most part the US gets a sliver of the options and technology. A good amount is also allocated towards future technology. VW has had a long history of not caring about the US market for the most part, and recently they tried to "Americanize" the product ala what Honda, Toyota, Nissan and other did years ago but went too far.

vdiv - 1/27/2015 12:46:27 PM

+1 Boost

Two reasons:

For some idiotic reason VW decontents their cars for the NA market and limits the available options. For example why can't we have the GTD or the GTE here?

Dealerships... Both sales and support are really appalling. A lot of people that would be perfectly fine with a VW choose an upmarket Audi or a BMW just so they don't get treated like crap.

chewy - 1/28/2015 12:50:57 AM

0 Boost

VW has gone too far "Americanazing: US products and has gone too cheap. I wish they had more European content for sale. the newest Passat looks to be an amazing product and one of the best front wheel drive sedans out there!

Chip - 1/27/2015 1:23:21 PM

+5 Boost

Whats wrong with VW in the United States? EVERYTHING!

My biggest issue is their reliabilty. It's atrocious. Quality seems good for a few months but then everything just starts failing and falling apart. All the horror stories, all the negative perceptions of the brand, all true in my brief experience.. I ignored it and bought into the hoopla with the new GTI and regret it immensely.

This company (VW and VW of America) has so many issues, I wouldn't even know where to begin. One VW sales manager actually said to me that VW hates America. I believe him. We get seriously decontented cars with crappy media systems, blown turbos, leaking sunroofs, no USB ports, cheap plastic everywhere, unsafe exterior lighting, sketchy electronics, horrible brand management, the worst website in the business, crap warranty and terrible aftercare and reliabilty. Will never own another. No clue how they sell so much in the rest of the world.

JDMUSMuscle - 1/27/2015 4:54:59 PM

+2 Boost

First, reliability.

Second, the United States is like a part of Japan. Most poor Americans prefer the Japanese cars (And prob wish they were Japanese as well) because of good reliability and also the Japanese cars are usually cheap, too. You can't really beat this.

So, VW might do well in other countries, but not in Japan Jr. aka U.S.A.

ParadoX - 1/27/2015 5:22:26 PM

+3 Boost

Because they fall apart after a few years and are incredibly expensive to have repaired. Who would want to deal with that?

cidflekken - 1/27/2015 7:02:54 PM

+3 Boost

Boxes on wheels with questionable reliability. That's all that needs to be said here.

MDarringer - 1/27/2015 8:31:48 PM

+3 Boost

Reality #1: their products are class trailing

Reality #2: their products are overpriced

Reality #3: their products have terrible reliability issues'

Reality #4: VW cannot see they have to cater to the American market in real time. The CrossBlue is two years away and was needed in VW dealers 15 years ago.

Reality #5: VW does not listen to dealers.

Reality #6:VW hates the USA

I say f#ck them

quizz - 1/28/2015 1:06:51 AM

0 Boost

Best car VW currently offers is the Sportwagen TDI manual transmission. Rock solid reliability, pricing, handling and comfort. Can't say enough wonderful things about it. Too bad the other models aren't as perfectly balanced.

TomM - 1/28/2015 8:29:04 AM

+3 Boost

Actually - They miss the obvious
Americans are too smart to be misled by the Hype.

VW is not a higher line car - they are entry level - Audi is the high line car. But VW prices its cars higher than the competition. In addition - as family cars - the space inside the cars is deficient. And the reliability is terrible.

However - VW was able to put YUGO out of business