Volkswagen Shelves Plans To Revamp US Operations

VW go home and never come back.

VW has failed to understand the American market for decades now. In europe - where very small diesel engine cars are the norm - they lead. However - in the USA - their cars simply are wrong for the market- except for maybe the Passat that was designed for the market but is way too conservative.

Worse - VW was known for cars that were relatively cheap and easy to fix - the Beetle. ITs cars are now just the opposite - and they are notoriously unreliable - and very expensive to fix. And the reason why their customers buy AUDI instead is because the VW cars are priced too close to the low end Audi.

I have to wonder if VW has the cash to pay for all the damages AND develop a completely new line of cars.

They should sell Bentley to Ford and Lamborghini to someone like Hyundai. Both companies have deep enough pockets to do an excellent job maintaining those brands. Selling them would generate money.

Bugatti needs to die. It makes no money.

Selling Porsche would also generate money. Hyundai/Kia could buy Porsche and then hand Porsche the keys to their engineering.

The basic question is how long until (1) VW pulls from the US market and (2) files bankruptcy.

Darringer - Boston Consulting has a seat for you, whenever you are ready to take on an "office job"!

Predictions - VW will split in half and spin off the "luxury" parts of itself.

(a) VW, Seat, and Skoda etc will be a standalone division and take all the liabilities of this diesel debacle. This entity may very well get "nationalized" by the German government (I'm not sure they would let it file for bankruptcy).

(b) Audi, Bentley, Porsche, Lambo, and Bugatti will be spun off into a division called "Porsche-Audi GMBH" which will be free of all the "bad liabilities" of the diesel scandal and be able distance itself from the bad-press, to preserve the "brand". Eventually there may be some rationalization of Lambo and Bugatti.

(c) The end result of this is that (1) VW's, 5 yrs from now, will be junky and cheapo (like GM's econo-cars mostly for the same reasons) - they will suck even more than they do now. (2) Porsche, Audi, Bentley, et al will continue to soldier along, but they will be somewhat starved of development dollars so for the next 5 years Porsche will slip from the innovation and performance throne it has enjoyed. (3) Bugatti and Lambo will be sold or shut down (ala Saturn, Pontiac, Oldsmobile etc.). (4) The VW Phaeton project will finally have a bullet put in it, as the Bentley platform shifts to a Panamera/A8 platform.

You heard it here first, kids!

mre30,

Slight variations to your statements...

When you say Porsche will be starved of development dollars, you need to remember that P is only a recent addition to the VW family and that it contributed more to the group than it drew from it. IMO, it will have 'deeper pockets' in Matt's scenario.

Audi is in a different situation due to the breadth of its line-up and the need to keep-up with the Jones - BMW and MB. Of course, Porsche money could be funneled, which would have budget attrition impact. However, that won't happen. What you'll see instead is P leadership leading this group and funneling technology instead of funds to Audi. We already were seeing this in the Winterkorn era. It started as a duel but P quickly established itself as the better technology lead.

The other aspect I'm not convinced of is Bentley. P+A makes sense. B doesn't. In fact, Lambo would make more sense than B. There are already shared parts and applications and it maintains a more sporty bend to the family.

But that's just my $0.02.