VW sales now less than Kia

Slow sales
Sales of the New Jetta are slow, and the TDI version is not yet available. How far will VW sales slide? At least they sold 300 Phaetons!

Volkswagen has been on such a long slide in the U.S. market that double-digit sales declines barely raise eyebrows -- except among the German automaker's frazzled U.S. dealers.

Last month, VW-brand sales tumbled 28 percent, for a 19 percent drop for the year to date. The comparison with the previous year should have been easy: VW sales were 12 percent lower in the first four months of 2004 than they were a year earlier.

Volkswagen now sells fewer vehicles in the United States than South Korea's Kia brand does. Although VW has a deeply loyal U.S. customer base, it has lost clients after allowing its model range to grow old in a fiercely competitive market.

So the company had a lot riding on the long-awaited new Jetta, its top-selling model in the United States.

It went on sale on March 19, but sales are off to a slow start. In April, VW sold 7,498 Jettas, compared with 7,982 a year ago.

Dealers say the trouble isn't the car itself. The new Jetta has won good reviews for its looks and handling, and performs well in crash tests. But the company initially shipped mostly richly equipped versions with automatic transmissions to its U.S. dealers and skimped on the less expensive, stick-shift models most popular with hard-core VW enthusiasts.

Shoppers found they could buy a fully loaded, larger Passat sedan for less than they would spend on a new Jetta. (The new Passat is due out in August.)

While dealers clamor for cars that can compete with Japanese models on price, VW is trying to push high-end, high-margin cars on U.S. customers to help offset the brutal impact of the dollar's weakness on its bottom line.

Last year, the automaker lost more than $1 billion in North America. In the first quarter of 2005, it lost $430 million and does not expect to break even in the region until 2006.

Adverse currency trends may be one reason why Volkswagen is not yet offering its Golf hatchback here. It launched the model in Germany in late 2003.

U.S. dealers are still selling previous-generation Golfs built in Brazil and will not get the new cars until 2006, although Volkswagen may start shipping the zippy GTI versions of the Golf at the end of this year.

VW says it postponed the U.S. launch of the Golf, which shares the Jetta's underpinnings, to space out new model introductions.

It will not launch the sporty Jetta GLI version until August and the station-wagon version will not go on sale before late 2006.

Of course, it takes time to revamp a model range -- particularly when the previous management focused heavily on premium but ultimately poor-selling models. So far this year, VW has sold only 300 of top-of-the-line Phaeton sedans in the United States.

Dealers say the new management is working hard to fix the problems that led to a drop in its quality ranking.

But with U.S. sales sliding for two years in a row, they are running out of patience.

The company has scheduled a meeting with its U.S. dealers in June. Its managers will have to demonstrate that Volkswagen can remain a profitable player in the U.S. market. After all, every other European mainstream brand that has tried has given up.

Click to expand...

"While dealers clamor for cars that can compete with Japanese models on price, VW is trying to push high-end, high-margin cars on U.S. customers to help offset the brutal impact of the dollar's weakness on its bottom line.

Last year, the automaker lost more than $1 billion in North America. In the first quarter of 2005, it lost $430 million and does not expect to break even in the region until 2006."

I was at the dealer the other day-waiting while they were doing the VX recall on my 01 Jetta-and was looking at one of the new Jettas......salesman then started talking about how VW is "moving upscale" on most all of their models.....well I just don't see the wisdom in that.....it use to be an "everyman" type of car-and moving "upscale" is fine for one or two of their vehicles-but moving the whole line "upscale" (which also means UP-price) is just not wise IMHO.......

But, I can't see how they can keep up with the "everyman" image and still be the quality car we expect. I mean, considering how cheap most Japanese cars feel, I don't think VW fans would be happy about it.

It would be nice if VW had a car that streeted under $15k, but I don't think they'd be able to do it, and make it attractive to buyers.

Jason

The Jetta's a good example-to get the leather seats I wanted I would have to buy a $4400 package that includes leather.

April BMW sales in the U.S. equalled that of VW, and in March were higher than VW.

Customer service and a bevy of old model cars WILL effect sales volume...that's a no brainer...ok...so the new Jetta is coming out...that will jack the sales numbers up a bit...but people KNOW now that VW service sucks...plain and simple....and people don't want to deal with it.

Obviously it's not a good thing if dealers start throwing in the towel. Underserved areas will become non served areas. I'm lucky to live in an area with a lot of dealers, although at least a few of them are total screw ups, and a couple that are rated as being better bets have done bad work on warranty work on my car. I'm just waiting for Honda to offer a diesel.

I think they have above average customer satisfaction with the cars themselves, well below with the dealerships. So it's very hard to attract new customers. The TV ads that appeal to college kids do not help either, if they are going upscale. And the print marketing is full of super nice pictures, but devoid of most technical information. The cars are selling themselves for the most part. I know our friends can't stop praising everything they see and feel in our NB TDI.

The VW has a feel that is more expensive than the car's actual price. Unfortunately, from my perspective, the poor reliability eventually kills that advantage. I end up wanting a car that I can rely on, even if it doesn't feel as good as the VW. What a shame.

I'm just waiting for Honda to offer a diesel.

Click to expand...

You ain't the only one!

I wonder how sales would be going if VW had introduced the new Jetta TDI at the same time of the 2.5L introduction. Also, it makes no sense to me that VW is stringing out new model introductions (i.e new Jetta in April TDi in May-June, new Golf in 2006) when sales are practically in a tail spin. Get the the new stuff out NOW and emphasize TDI's as well.

I was at the my dealer yesterday doing the heated seat/switch recall thingy on my 2003 Jetta. I got to talk to 4 salespeople 'cause no one else was looking at VW's. For a dealership that prides itself in emphasizing diesels, they had maybe 4 in stock; 2 Passats, 1 new Beetle (a 2004) and one old body style Jetta. Yet they had a whole row of new Jetta 2.5L's ranging in price from $24-$27k.

I think VW is making a huge strategic error in not capitalizing on their current position as sole provider of relatively low priced diesels in the U.S.

Really sad

The decissions that VW has made with it's product line will continue to see declining sales. When you have an auto that gets lower than average MPG, a diesel that most people won't consider. Dealers that are so indepedent that they won't support the product. I have a friend that is looking at a different car for his wife. I've told him to look at the passat diesel. His wife doesn't want to deal with the diesel, I suggested a gas wagon, They didn't like the mileage. I suppect that they will get a volvo wagon which has far superior mileage. It's sad, because I've been nothing but happy with my diesel. What I have alot heartache with is the dealers. VW needs to get a better handle on its dealer network. As far as I am concerned I will not buy another car until the ULSD is in place. I will then see what diesels are available at that time. It may or maynot be another VW. If VW has a V6 TDI in a wagon, they may keep me, again it depends on what vehicles are available.

An upscale VW - isn't that an Audi?

I have a friend that is looking at a different car for his wife. I've told him to look at the passat diesel. His wife doesn't want to deal with the diesel, I suggested a gas wagon, They didn't like the mileage. I suppect that they will get a volvo wagon which has far superior mileage.

Click to expand...

Gasoline VW's don't have great fuel economy, but the Volvo's don't either.

The V50 (aka Ford Focus, roughly Jetta Wagon sized) gets 22/30mpg with the cheapest engine and 19/26 in the AWD model. The V70 gets about the same.

The Jetta Wagon gets 24/30 or 24/31 for the 2.0 and 1.8T engines. The Passat gets 22/31 with the 1.8T or 20/28 with the V6.

There might be other reasons to get a Volvo over a VW, but fuel economy is not one of them.

These numbers came from Carpoint:

Passat Wagon: http://autos.msn.com/research/vip/Spec_G...tab=2&sub=0

V50: http://autos.msn.com/research/vip/Spec_G...tab=2&sub=0

Jetta Wagon: http://autos.msn.com/research/vip/Spec_G...tab=2&sub=0

V70: http://autos.msn.com/research/vip/Spec_G...tab=2&sub=0

alex

An upscale VW - isn't that an Audi?

Click to expand...

Natch!

VW's problem is real simple: Terrible reliability! Let's stop blaming the dealers, and start admitting that we would not even NEED to see the dealers that often if these things were not HANGER QUEENS! Although my old Passat is a good car, I would NEVER buy a gasoline powered VW. ANYTHING the Germans do in "gas" the Japanese do better. By the way, the Mazda3 is the BEST SMALL CAR IN THE WORLD. When I took a test drive, the salesman told me to lower ALL the windows before going over a set of train tracks. He dared me to hear even the slightest squeak or rattle. If I had been test driving a VW, I would have been afraid one of the windows would have fallen into the door! If you guys think a VW is more "solid" than the better Japanese cars, then you have not driven the "3". It EASILY beats the new Jetta in fuel economy, power, and price. Its a GIVEN that it will be more reliable! If it ever gets the diesel Mazda offers in Europe, its "aufwiedersehen VW" in the US market. Once VW no longer has the diesel market locked up, they will have NO selling points versus the better Japanese brands. I love my "Dubs," but this company needs to get a reality check, and some real management.

Dealers say the trouble isn't the car itself. The new Jetta has won good reviews for its looks and handling, and performs well in crash tests. But the company initially shipped mostly richly equipped versions with automatic transmissions to its U.S. dealers and skimped on the less expensive, stick-shift models most popular with hard-core VW enthusiasts.

Click to expand...

I passed a Jetta V today... but I didn't really notice it til I was past. Then I looked in the rear-view mirror and confirmed the distinctive chrome grill. Too bad the new Jetta doesn't have the kind of styling that makes you go "Wow!" from a distance. It's not unattractive, it's just a little ordinary.

Shoppers found they could buy a fully loaded, larger Passat sedan for less than they would spend on a new Jetta. (The new Passat is due out in August.)

Click to expand...

That is nuts. Just a bad, bad marketing decision. Pontiac did something similar with the G6... introduce a brand new model, then only offer customers a version of that model that they didn't want.

There is nothing wrong with the new Jetta with the 2.5 liter engine. But folks could buy the old model, reasonably equipped, for well under $20k. And even get a TDI for right at $20k. And get a TDI wagon for about $21k. They might expect a slight price increase, considering that the new Jetta is improved in so many areas.

It would appear that VW plans to maintain the price differential between Jetta and Passat by sharply raising the price of the new Passat! Yeah, that will really jump-start sales volume.

While dealers clamor for cars that can compete with Japanese models on price, VW is trying to push high-end, high-margin cars on U.S. customers to help offset the brutal impact of the dollar's weakness on its bottom line.

Click to expand...

This won't work. And, has the dollar really lost a lot of value against the Mexican peso or the Brazilian real?

Adverse currency trends may be one reason why Volkswagen is not yet offering its Golf hatchback here. It launched the model in Germany in late 2003.

Click to expand...

Stupid, stupid, stupid. We should have had the Golf V in the US at least a year ago. Currency trends? Bosh!

All Jettas/Boras are built in Mexico. Golfs are built in several countries, AFAIK. It's not as if there is a shortage of capacity. Where are the Golf V's with the PD130 and PD150 TDI engines, with 6-speed gearboxes, with 4Motion? And who was the idiot who decided all Golfs had to have 4 doors?

Successful companies are expanding their product line. Toyota used to have Coronas, Corollas, and Celicas. Then small pickups. Avalons, Solaras, roadsters, bigger pickups, minivans. The Lexus brand of upscale products. The Scion line of downscale products. Every year, more and more reasons for people to buy Toyotas.

VW seems to be going in the wrong direction. Not really in the minivan segment, which it invented. Not in the small pickup segment. Not offering Tourans, Sharans, or the Golf Plus. Not offering manual transmissions in the Passat, or in the initial new Jetta production. Not offering Jetta wagons, which could be huge. Will there be 2006 Passat TDIs? Probably not. These are all signs of a troubled car company.

VW says it postponed the U.S. launch of the Golf, which shares the Jetta's underpinnings, to space out new model introductions.

Click to expand...

Not even remotely plausible. But if true, even more evidence of rampant stupidity in the higher echelons of VWAG.

It will not launch the sporty Jetta GLI version until August and the station-wagon version will not go on sale before late 2006.

Click to expand...

With sedan and hatchback sales stagnating, sure, why not just abandon the station-wagon segment of the market?

Dealers say the new management is working hard to fix the problems that led to a drop in its quality ranking.

Click to expand...

Maybe. But the dealerships are 75% of the quality problem. It won't matter how good the cars are, if the dealerships can't repair the things that go wrong. Or if their solutions are always throwing the most expensive parts at every problem. Or continuing to use the wrong lubricants.

Companies in trouble are sometimes forced to go to extreme lengths to reassure the customer base. Something like a 100k mile warranty.

VW needs to get a lot of new products into the marketplace, very soon. It needs to improve the dealer network. And it needs to reassure the customers that its products are reliable. That's a lot to ask from a management which has made so many mistakes in the last five years. I hope they succeed. My fingers are crossed... because I'm planning on buying a 2009 Golf PD130 6-speed with AWD, for about $24k in 2005 dollars or less. I'll be ready to buy, I hope they are ready to sell.

I don't think that VW's reliability is that bad. Sure, a Honda or Toyota seem like they don't break at all, but this is not really true and their service isn't that much better either. CU ratings are relative, with all cars remarkably better with each passing decade. This is not an excuse for VW to have less reliability, but being in business myself, good help is hard to find!

As for VW losing its shirt, I doubt it. Knowing that in its home market it is still the leader makes the US/Canadian market not as important to panic over. A steady conservative approach would shelter VW from any rash decisions that may fall victim to wild fluctuations in the dollar and the fickle American consumer's preferences.

I agree that VW should stress its market position in diesels, but there seems to be a lot of dissent in the American automotive press about their advantages. That may change, but VW is probably hedging its bets.

I don't think that VW's reliability is that bad.

Click to expand...

And in my case, I have no complaints at all. I'm happy with my Golf, and would buy another in a heartbeat. But I've read about the complaints of others.

A steady conservative approach would shelter VW from any rash decisions that may fall victim to wild fluctuations in the dollar and the fickle American consumer's preferences.

Click to expand...

VWAG has failed in this regard. The top management has squandered billions on R&D and production of cars like the Phaeton and Toureg, and buying up niche luxury car makers. It has repeatedly placed bets on risky ventures, and at the same time neglected to invest adequately in its bread-and-butter product lines.

I agree that VW should stress its market position in diesels, but there seems to be a lot of dissent in the American automotive press about their advantages. That may change, but VW is probably hedging its bets.

Click to expand...

That's like putting 90% of your investment portfolio in gold options, and 10% in a money market fund.

VW makes some of the very best small diesel engines in the world -- perhaps THE best. Given time, many other companies could catch up. Betting on its diesel technology is not risky; but failing to take the maximum advantage of its diesel technology is unfair to VW's shareholders, employees, and customers.

It does not take a rocket scientist to observe how popular diesels have become all over the world. Nor to notice that the same thing is happening in North America.

Yes. VW made the Touareg for an SUV hungry US market.

The Phaeton was an aside. The same platform is made for versions of the Audi, Bugatti, and Rolls Royce. This was not a risky venture for them in the US. It may have been their way of addressing quality at dealerships: i.e. give dealers an incentive to improve.

Going upmarket in general may have been risky, but so is standing still, as you seem to agree with.

It has repeatedly placed bets on risky ventures, and at the same time neglected to invest adequately in its bread-and-butter product lines.

Click to expand...

This statement is patently false. In its home market, VW is ahead with engine technology and currently new models. Maybe the timing could have been better, but to say that they neglected their bread and butter markets is stretching it a little too far.

VW has had the usual problems with upper management, while riding a wave of recent success. I would say that the new Golf is a remarkable achievement that other product lines will build on.

In its home market, VW is ahead with engine technology and currently new models. Maybe the timing could have been better, but to say that they neglected their bread and butter markets is stretching it a little too far.

VW has had the usual problems with upper management, while riding a wave of recent success. I would say that the new Golf is a remarkable achievement that other product lines will build on.

Click to expand...

I'd like to see the Golf V in the American showrooms, not just on European websites. (And the Polo TDI, and a Caddy TDI, and the Concept R roadster with a TDI.)

Could it be that VW doesn't have the financial resources to switch over to the new models at all its plants? (because it has squandered so much money on ill-planned ventures?)

I don't think that VW's reliability is that bad.

Click to expand...

I'll agree with that. I had an injection pump go at 37k...replaced under warranty. Headlight bulb replaced at 38k under warranty. Granted I only have about 52k on my Jetta but so far I'm not dissapointed.

Then again, perception is reality. Alot of people I know just think VW's have reliability issues (whether or not they have any facts to back it up). VW should address this perception...maybe with a 100k warranty on the TDI.

That may change, but VW is probably hedging its bets.

Click to expand...

I guess that's OK but too much hedging can be viewed as being too cautious; potential consumers may feel that VW lacks faith in their own product. If that happens, there won't be enough hedging VW can do to overcome. VW needs to be more aggressive and go on the offensive before the rest of the world offers diesels in the U.S.

I hate to say it, but in terms of reliability and longevity of parts, I'd have to say the best car I've seen is the '96 Nissan Maxima I bought used at 40,000 miles that my ex wife ended up with. It has about 180,000 miles on it now and other than maintenance items, a couple of CV joint boots, and brakes, nothing has ever been replaced on it. It even has the original struts and exhaust system! It only had one dealer recall, and it was not safety related (O2 sensor replacement recall) and zero warranty claims. My '04 Jetta has had 3 recalls and a warranty claim so far.

--Nate

"CU ratings are relative." True, Tin Man, but people in this forum should realize CU has shown an institutional bias against diesels. The best example of this is CU's decision not to list diesel models in their web site's "Fuel Efficient Vehicles" category; if you have a subscription, check this out for yourself.

Also, while CU goes out of its way to list hybrids separately from their gasoline counterparts, diesels are lumped in as a subset of the gasoline model, with a review only available for the gasoline model. This is true of VW and Mercedes, with the only exception being one listing I found on their website for the TDI Passat.

Here's how CU portrays the Passat TDI's diesel engine:

"The 2.0-liter, 134-hp four-cylinder turbodiesel engine got 28 mpg overall ..." Ignoring engine break-in for a moment, this seems well below the averages experienced by the TDI owners I've encountered.

"However, the car is not particularly quick, and under acceleration we noticed some of the smoke, smell, and engine noise that's typical of a diesel engine." You've all experienced the difference between diesel and gasoline engines. Most will agree that the TDI engine provides ample acceleration, especially on the low end. As for engine noise, smoke and smell, from this I wondered if gasoline-powered cars emit perfume and silently slip between locations.

"All diesels emit more nitrogen-oxide (NOx) and particulate emissions than similar-sized gasoline engines, which contribute to smog and respiratory problems." No mention has been made of new emissions controls. And while quick to point to NOx and particulate emissions, no mention is made of the emissions categories where diesels beat gasoline hands-down.

CU is a useful resource, but, when it comes to diesels, I do not expect impartiality.

One of the most reliable cars I had was a 1985 VW Jetta turbodiesel. I bought it with 140,000 miles on it and it had probably 180,000 when I finally managed to wreck it. It burned no oil and ran perfectly, getting 50 mpg all the time. That's the main reason I bought my rather disappointing 2001 Golf.

Once VW no longer has the diesel market locked up, they will have NO selling points versus the better Japanese brands.

Click to expand...

Oh bullsheet. They will always have superior passive safety, active safety, durability and ease of repair.

Back on topic. As usual VW screwed up an introduction of a new platform by being late and scattering the offerings over several years.

This is not an excuse for VW to have less reliability, but being in business myself, good help is hard to find!

Click to expand...

This is the very essence of good management. Good management finds--and keeps--the good help.

Well, all my FRIENDS tell me I am FULL OF IT, so I didn't learn anything new! Now that I am drinking DE-CAFF, I think I do need to restate some of my comments. Yes, in many areas of build, finish, reliability of major components, etc. VW DOES have strong points. However, all of their cars suffer from what I can only describe as "finiky-ness" of hardware, and a lot of their outsourced parts. Will a VW last 20 years (with good maintenance) and look a lot better than a 20 year old Japanese car? SURE! Will the average American consumer be willing to spend the THOUSANDS of dollars, and untold hours of aggravation to recoup this long term (hypothetical) benefit? HECK NO...

VW is pulling a GM, sell junk that is unreliable for alot of $.

I can see how VW has to sell thier stuff for more $, thicker sheet metal,etc - but the reliability is not there, especially with the non-TDI stuff. They have the rap of selling lemons that are very $$$ to fix.

They want too much $ for thier stuff, and it is only getting worse. Bring out a polo TDI that performs well and has ROOM inside, and price it right - it will be the next Rabbit...

Instead of doing that, they bring out useless cars like the Phaeton,etc

I agree with the members posts above, I would gladly take a Honda Accord iCTD-i over any VW TDI, and I would pay more for it too

I do not want VW to ever appeal to the average American consumer. That would mean a VW would become another bland, boring refrigerator like appliance on wheels. That is what the average consumer wants. Buy it, drive it, trade in a five to ten year cycle. No emotional involvement whatsover in their motoring. I go way back to the Super Beetle and I've worked on just about everything VW has made in the last 30 years. I have introduced many, many people to VW and of the people who tried one, the number who become loyal VW buyers outnumber the ones who were not happy 10-1. I am also the "carguy" in my family and work on Dodges, Hondas, Nissans, Yodas, etc....... Hondas are a huge PIA to work on, don't even ask me about trying to change an alternator on a 300Z and my niece bought a Corolla that required two alternators, a valve cover gasket, a starter, the transmission leaked and all sorts of #### broke in less than 50k miles. I have NEVER been left at the side of the road in all my time of VW driving except for the times I broke the car. The last Yoda I had required the hook twice. I also see a very different reaction to cars breaking depending on the brand. When the Honda driving relatives have a problem they say "that's strange" When a VW has the same problem, they say "it's a POS". Personally I think people who whine like a baby each time they have to fix their car should take the bus