Is VW in Trouble in the U.S.?
July 19, 2007 – 3:50 pm by Matt Radel
Filed under Cool Stuff
Businessweek seems to think so.
Businessweek published an article (from the future apparently - it’s dated July 23rd and today is the 19th) today, exploring VW’s struggles in America and pondering a bit about the brand’s future.
The key points touch upon the “failure” of VW’s renaissance ad campaign with the Jetta, Rabbit and GTI, declining sales in America and attack VW’s decision not to bring back the Microbus (I’ll second that). Buyers in the U.S. expect “more funkiness” from VW, and claims that Germans don’t understand. The real crusher comes from Rebecca Lindland, a director at consulting firm Global Insight Inc. who says:
“I’ve never seen a brand struggle so hard to understand the U.S. market and fail so miserably.”
Ouch. While it’s hard to argue with numbers, I don’t think things are quite as dismal as the article makes them out to be (GTI, car of the year?). But the brand is clearly in a struggle not only with it’s product offerings, but it’s very identity. But the most chilling comment comes at the article’s end:
Says one executive close to VW: “For the first time in some time, the phrase If we are to stay in the U.S.’ precedes a lot of conversations at VW.”
I’m keeping my fingers crossed that they can turn things around.
Is VW in Trouble in the U.S.?
July 19, 2007 – 3:50 pm by Matt Radel
Add to this.
Bland styling. The new Vee dubs are extremely boring, the Jetta looks like the soon to be gone, Toyota Corolla.
Dismal quality, the cars quality has been put at the bottom of the lists.
As far as GTI for car of the year, the car of the year changes from magazine and consumer group to magazine and consumer group. Using a COTY award to pick a car is a horrible way to shop.
The only item I know of that is even close to desirable at the moment is the diesel engine, for mileage, and you can’t build this company on a diesel car.
I’ll agree with ya for the most part. The styling is bland right now. VW seems to be trying to play Toyota’s game to some degree, and it’s not working.
When the brand was more successful back between 1999 - 2001, they had more distinction. You could tell a VW was a VW by it’s lines. If you debadge a VW now, it’d be pretty tough to tell it from a lineup of generic of Toyotas, Hondas and the like.
The VW designers need a creative boost, and fast.
I wouldn’t go so far as to say that sales are declining over the last year or two. Maybe since its height in 2001, but the last couple of years have been flat for sales. Declining they are not, increasing they are not…just a little flat.
The problem that VW has in trying to sell/market it’s products in the US is that they are trying to sell themselves as a niche brand. More standard features, more safety features, longer warranty’s than the Costco brands like Honda and Toyota. Problem is, when shopping for price, most people will with the Costco brands rather than pay the extra 10% for a VW, regardless if it’s a better value or not.
VW, can’t de-content their cars just because they’re to be sold in the US. They can’t take away things like standard 4-wheel ABS, side curtain airbags, full size spare tires, 4 year warranty’s, sound dampening materials, and over all cheaper fit and finish materials because it would be too expensive to make a “US” version and a “European” version side by side.
The big insider joke with VW when talking about the Costco brands is…”When you don’t put anything in the cars, what is there to break?”
Well, I agree that quality has been sub-par in recent years, my 99 Jetta, while not one of the “horror stories”, and not perticularly bad, has more than its share of problems–hopefully they are going to take care of that. And if VW had taken care of their customers between ‘99 and ‘01, I don’t think that they would be in this particular pickle.
Maybe the styling is “bland” too, but the feedback I get on my ‘06 GLI has always been positive, and my wife and I LOVE the car. (I have owned 6 VWs BTW) It seems really well built, and it is simply a blast. We were considering a “pre-owned” Audi A4 as well as a Saab 9-3, and the GLI was simply superior to the Audi in size, and the Saab in performance. (Yes, the Jetta is larger than the A4 inside and out, and competes with the Saab for interior room!)
I accidentally hit the post button. :-/
I don’t know how VW can get the word out, because their press is consistently bad when people mention reliability, a thing they have earned unfortunately. What I don’t agree with is that VW is “expensive”, because often it has standard features which are options in other makes and models, or maybe not available at all, but that is not immediately obvious to a prospective buyer.
Anyway, I certainly hope they stay, but if a business need says otherwise we should keep in mind they are not running a charity.