Volkswagen has continued to do well in its home market and the rest of Europe. It is also the leading seller of cars in China, competing with GM (NYSE: GM) for the top spot. But, since it sold its compact Beetle sedan here in the 1960s, VW has become a nothing brand in the U.S.
Now the management of VW wants to change all of that, and compete with Toyota (NYSE: TM) for U.S. share using high quality, no-frills cars. According to The Wall Street Journal, Volkswagen has said it wants to sell about 1 million cars annually in the U.S. by 2018, compared with about 330,000 last year.
VW plans to add 12 new models over the next several years and keep prices of models like the Jetta and Passat below comparable Toyota models.
And, that will pick up market share in the U.S.? VW, dream on.
VWs don't sell well in the U.S. because no one wants to buy them. It is not as if the company does not have plenty of dealerships. Its luxury model, Audi, does just fine. But how many car buyers say, "I just have to have one of those new VWs"?
The German car maker is also coming up against stronger products from the locals, Ford (NYSE: F) and GM. Selling cars in the U.S. is part of a life-and-death struggle for them to hold sales in their home market.
VW should keep its focus on China.
Douglas A. McIntyre is an editor at 247wallst.com











Reader Comments (Page 1 of 1)
10-18-2007 @ 8:21AM
jpdr1100 said...
McIntyre couldn't be more wrong in his assessment of VW's situation. There are numerous owner surveys which show VW models to be some of the most desirable vehicles on the market.
What the surveys also show is the VW's quality is not competitive with the best of the industry, and THAT is what is holding them back. Its a love/hate thing. The cars are a blast to drive, and most owners love them, but they have had a string of little glitches which can make ownership trying.
McIntyre is equally off in his use of the "I have to have it" gauge for measuring likelihood for success. I hear few if any people saying they have to have the latest Toyota. In fact the Toyota buyers I know, and there are many, are primarily not "car people" at all. They view their Toyotas as appliances, and buy when needed. My VW driving friends are far more enthusiastic.
McIntyre needs to get out more.
10-18-2007 @ 9:15AM
td said...
I agree with the previous comments. Have you noticed the growing number of compact "muscle" cars zooming around - like the Cooper S, Mazda 3R, VW GTI, and Subaru WRX. These cars are affordable, get good gas mileage and are a blast to drive. As gas prices go up and the younger generation gets green, they will still want their speedy fun - thus VW is on track and McIntyre is a dinosaur.
10-18-2007 @ 9:30AM
Allen Freeman said...
I agree McIntyre couldn't be more wrong. VW is seen by even up-scale purchasers as a some times quirky, but always high quality vehicle.
The new Jetta has been touted in numerous publications as the most up-scale entry level auto, but is knocked for being expensive.
If VW can get some of their prices down, they can be a hit.
10-18-2007 @ 10:42AM
Byron Spain said...
Having owned one VW and one Mercedes, I have no regard for the quality of German made vehicles. Both were junk. Toyota would have to fall a long way to even come close to the crap that VW peddles. If they come to the US, they will fail - again.
10-18-2007 @ 11:07AM
jpdr1100 said...
"If they come to the US again????"
Who do you think is NOT selling here now?
10-18-2007 @ 12:44PM
eric said...
I have owned German cars for the past 20 years and loved them until I bought a 2002 VW. My current car is a 2002 VW Passat. Fun to drive, but a piece of junk. Lack of quality and customer support are holding VW back nothing more. Look at all the surveys of owners regarding reliability and quality and VW ranks poorly. That is the main reason VW has failed in this country. My VW has constant recalls. VW has had a major problem with the 1.8 turbo engines in certain years and will not acknowledge it is a faulty design. I had to REPLACE my engine in a 3 year old car (at my cost) due to known (to VW, but not many consumers like me) an "oil sludge" problem. I am not alone, research 1.8 turbo problems on the net for VW and Audi. Its amazing and disturbing. In addition, for another known problem, look up heated seat fires! BUYER BEWARE!!!
10-18-2007 @ 3:35PM
V.S. said...
German cars are not worth the price. I've owned two SL500's and they were nice cars but very much overpriced compared to what the U.S. has to offer in a roadster.....no more.I'm sticking with Ameircan....The quality has improved so much that I do not feel that I am "taking a chance" anymore....the quality is there....I own an Impala, truck and corvette..........all GM.....no problems!
10-18-2007 @ 3:39PM
jpdr1100 said...
VW stepped up in the sludge issue, extended the warranty on the cars involved, and reminded owners about what oils they are supposed to be using for these turbocharged engines, and how frequently they need oil changes.
Sorry you missed it.
10-19-2007 @ 1:29AM
jim said...
I had a 2004 Jetta TDI. Loved the car, but the car didn't love me back. Dealer replaced glow-pug assembly twice after check engine light came on, only covered under warranty once (for 1300.00-second time I got screwed with the bill). Plastic glove box hinges broke in half in the winter. What moron of an engineer designed the plastic pan under engine that cracked to pieces every time I drove into a drive way any faster than a crawl and required an approach into the drive from an angle. Oh, and the drivers windows that fell into the car door body. Self replace a tail lens lightbulb for $5.00 (even though the manual didn't recommend the owner do it themselves). Didn't VW stand for everymans car or something like that. Check engine light equated to empty your wallet light. I actually enjoyed driving the car up to 700 miles on a tank, but the negatives far outweighed the positives. In the end, I sold the VW at 45k and kept my 4Runner. The reliable 4Runner has now gone 131,000 miles on the same brakes. Only seen the dealer for timing belt, water pump scheduled replacement. ( I use a local garage for oil change, minor tune ups) Still gets me 19-20 mile per gallon. The 4Runner has been touted by Consumer Reports as a vehicle that is recommended to last past 200,000 miles. I want to believe in VW, but they need to stand behind their product with a warranty that will protect the consumer for at least 100,000 miles.
10-20-2007 @ 1:57AM
grant said...
As a hobby, I acquire, recondition and resell VW camper buses (transporters) from the late 70's. These things sell reconditioned used for more than they did new. Herein lies the future of VW. If they bring a microbus that is simple, affordable, and reliable to America they will sell a ton of them. Likewise if they introduce quality people's cars without all the computers and sophisticated engine and drivetrain electronics and suspension that have made their other offerings so unreliable, they will beat Toyota at their own game. Save the Audi's for sophistication - I have a 96 A8 and it is an awesome car with only one major fault - shitty, expensive transmissions to replace. Otherwise it is a dream. Have owned a 74 Audi 100Ls -great car, 85, 87 and 90 Quattros including the V8 quattro - absolutely bulletproof transportation, Audi Sport Wagons, three Eurovans (shitty trannys again, otherwise wonderful). If VW keeps the VW product line functional, simple and reliable, they will succeed. Get the Audi reliability up and reach for the luxury market with that brand and they will succeed. That simple.
10-20-2007 @ 6:10AM
anthony said...
I have owned 4 Jettas over the years...and all have been superb.Many freinds family members and collegues have VWS ...and all love them.
I have also owned Ford and GM products...and niether were as good.
VW desperatly need the Jetta sports wagon as well as the diesel engines to boost sales in 2008.
VW are on a roll world wide...and their sales in 2007 are better than in 2006...which was a record year for the company.
VW has image...their cars are bought by funky youngsters who are well edjucated.
Toyotas are far more bland.
Give me a jETTA OVER A cOROLLA OR cAMRY ANY DAY OF THE WEEK.
10-22-2007 @ 12:59PM
jpdr1100 said...
VW is (was?) planning to bring back their minivan. That's the good news. The bad news is that it is to be built by Chrysler.
Hopefully they will scrap this plan before it hits the road.