Is VW cheating us?

[TomB]

You know the whole point of moving production of the Passat to the US was the exchange rate. The claim was that with this the cost of the product was negatively impacted. Right now the Euro is $1.29. That means 29% more costly.

So why did the price of the Passat not drop by the same percentage? European labor costs are the same if not MORE than the US.

The CC not TDI about the same equipment level is $35K, the Passat is $33K that is only a 6% price difference. Even the Lux version is $37K and only a 12% difference in pricing.

I have to wonder if VW isn't really gouging us with this vehicle by not passing along the REAL savings to us. To top it off we get de-contented vehicles, the interiors of the Passat are not the same quality as the CC.

 

[compu_85]

Have you sat in a new CC? I think the dashboard and console are nicer on the NMS.

-J

 

[IFRCFI]

I have to wonder if VW isn't really gouging us with this vehicle by not passing along the REAL savings to us.

Your post made me chuckle! Thx!

You have heard of Capitalism, right? Competitive market forces? Is there another mid sized TDI on the market? Companies are in business to turn savings into increased profit, not decreased prices. Apparently the market is bearing the price of the Passat, based on sales.

 

[showdown 42]

I was under the impression that the revised Passat was quite a bite lower priced than the previous model, The Jetta is almost 10k cheaper than the previous model. I was also under the impression that the plan to bring production to the US was to make both models jetta and passat competitive with the camry and other lower priced competition to gain market share.

 

[ymz]

I have to wonder if VW isn't really gouging us...

No need to wonder... and if you think you're being gouged down in the U.S., come up here for a visit... (and there's nothing specific to VW about the gouging up here... all the manufacturers jack up the prices - on almost all types of goods...)

Yuri

 

[waltzconmigo]

TomB---are you actually suggesting that if the cost would have been 30k that it should now be 21k? this is not at all how it works. first, for at least the last 20yrs both state and local govt's have been giving "sweet heart" deals to attract jobs by giving, among others, major tax breaks, land deals and infrastructure improvements. the southern states seem to have taken this path more than the north. Some of the derived savings comes from this.

i know very little about corporate accounting but i do know it is a complex "science". secondly, what percentage of the actual parts come form the US? if these parts are made outside of the US and purchased in dollars they actually cost 30% more. How many man hours actually go into each vehicle? More of the savings come from the wage differential. Obviously shipping costs are lower with "local" production.

in short---far more goes into the pricing of any product than just place of production and exchange rate. i could go into this further if you would like but i am sure you get the overall idea of why what you seem to be suggesting is just not how the economy works and obviously vw wants to take some of those savings to add to their bottom line. You are not entitled (not that i am suggesting that you think you are) to every cent saved even though that would be nice.


ciao,
waltz

 

[TDI2000Zim]

I wouldn't whine for the Passat price, considering that the Camry and Taurus are priced at the same level.

Perhaps TomB should consider buying the Kia Optima instead. However, the price differential is not that huge.

 

[TomB]

Your post made me chuckle! Thx!

You have heard of Capitalism, right? Competitive market forces? Is there another mid sized TDI on the market? Companies are in business to turn savings into increased profit, not decreased prices. Apparently the market is bearing the price of the Passat, based on sales.

There is the quote attributed to PT Barnum "There's a sucker born every minute."

Sorry, but after checking into this it makes me feel like I fell for it hook line and sinker. Live and learn.

 

[TomB]

I wouldn't whine for the Passat price, considering that the Camry and Taurus are priced at the same level.

Perhaps TomB should consider buying the Kia Optima instead. However, the price differential is not that huge.

LOL! VW stated that moving production to the US would drop the price. It really did not based on what I see, so I pointed it out to see if anyone else noticed.

By the way, I am not looking for the cheapest, I am looking at the VALUE of what you get for the money. To me a bloated, de-contented interior is not a value to me.

I will go Audi instead. Still VAG but true German made product for the price.

 

[mohawk69]

It's not confusing. There is only ONE factor in determining the price of a product. What will the market bear? Nothing else matters. If a Yugo costs $40K to produce because of various inefficiencies could they sell one for $50K? If GM could build the Corvette for $10K would they sell it for $15K?

 

[ajfd]

It really did not based on what I see.

Put your glasses on:

Base Price of Passat, 2010: $27,945
Base Price of Passat, 2012: $20,765

 

[mikeyinpa]

Your post made me chuckle! Thx!

You have heard of Capitalism, right? Competitive market forces? Is there another mid sized TDI on the market? Companies are in business to turn savings into increased profit, not decreased prices. Apparently the market is bearing the price of the Passat, based on sales.

Thank you for saving me the trouble of typing that all out! We all love capitalism and love *****ing about prices being too high at the same time. Very confusing!

 

[mikeyinpa]

LOL! VW stated that moving production to the US would drop the price. It really did not based on what I see, so I pointed it out to see if anyone else noticed.

By the way, I am not looking for the cheapest, I am looking at the VALUE of what you get for the money. To me a bloated, de-contented interior is not a value to me.

I will go Audi instead. Still VAG but true German made product for the price.

Audi sure makes a sweet car, and I would own one IF they brought in a sedan size TDI AND I felt the car was worth the premium price in purchase and service costs to me. I looked long and hard at getting an A6 and came to the conclusion that it was overpriced TO ME.

 

[c17chief]

You have to keep in mind that just because 1 euro is X% higher then $1 doesnt necissarily mean that the cost of things are that same X% different. In the case of the euro, yes, the original intent was for the value to roughly equal dollars, but that doesnt mean that everything over there is priced the same as here. In other words, even if 1 euro = 1 dollar, just because a loaf of bread at the grocery store here commonly is $1 doesnt mean a loaf of bread over there is 1 euro...that sort of thing. Yes, the same car produced here should be cheaper then identical produced in germany, but exchange rate differences is only a piece of the overall pie as far as reasons why go.

 

[SMTM]

[/quote]
By the way, I am not looking for the cheapest, I am looking at the VALUE of what you get for the money. To me a bloated, de-contented interior is not a value to me.

I will go Audi instead. Still VAG but true German made product for the price.[/QUOTE]


You have no idea how to run a business

Union employee by chance?

 

[South Coast Guy]

Vote with your feet. Buy a Chevy or a Chrysler; there is real value!

 

[smoav8r]

I have to wonder if VW isn't really gouging us with this vehicle by not passing along the REAL savings to us.

They are not cheating you. They are not even gouging you. You and VW entered into a voluntary transaction. The price of the vehicle is what it is based on similar products in the open market. That's the beauty of the free market pricing system. VW is in business to pass the "REAL savings" which are called profits to their shareholders NOT the consumer. Did Steve Jobs pass along the "REAL savings" from that gadget you bought from him because he got it produced cheaper in China? I think not.

You, I, and everyone else bought our NMS because we wanted the vehicle more than we wanted the cash it took to buy it. VW sold the NMS to you because they wanted the cash more than they wanted the vehicle. This is called subjective value.

Google Austrian Economics some time and see how economics really works.

 

[dpospres]

In an apples to apples comparison.....a base gas Passat is under $21,000. The base Prius is over $24,000..... I don't feel cheated at all

 

[TomB]

Put your glasses on:

Base Price of Passat, 2010: $27,945
Base Price of Passat, 2012: $20,765

Apples to oranges. You must consider the features and options for the pricing. Just because they both say base does not make them the same.

The 2012 Passat base had less features. It was a stripped down model.

 

[TomB]

By the way, I am not looking for the cheapest, I am looking at the VALUE of what you get for the money. To me a bloated, de-contented interior is not a value to me.

I will go Audi instead. Still VAG but true German made product for the price.[/QUOTE]


You have no idea how to run a business

Union employee by chance?[/QUOTE]

LOL! Acting like a jerk.

No and never have been.

 

[TomB]

Vote with your feet. Buy a Chevy or a Chrysler; there is real value!

LOL! Love it or leave it. Don't ever demand anything better. That is the EASY way through life.

As I said, Audi, not cheap ass American crap.

I left Pontiac after a family tradition since the 50's in 2000 to go to VW because they had a QUALITY product, with great German Engineering and workmanship, and economic prices and now I feel they are pandering for sales numbers instead of what they have been for years.

I just asked if anyone else felt this way. I don't usually follow the mob or crowd mentality and that is good. This is a 13 year, 5 vehicle VW customer they are losing.

BTW, I enjoy the Jeep, with the MB 3.0L V6 Diesel and automatic transmission, for it's drive train performance. The DSG combined with the ECS, Traction control and anti slip just acts too skidish (sp?) for me.

 

[TDI2000Zim]

Come on, give American employees working in Tennessee a chance.

When you buy a new Passat, you put food on the table of a fellow American in Chattanooga.

 

[psd1]

Market based economics! I think the Passat TDI value is excellent, and I will own one. Is it perfect, no. Do I think there is anything that compares in size and economy? No. Thats why I will support VW with my wallet! Now when others come up with a reliable efficient diesel option they will get a look as well!

 

[FormerOwner]

Simple Capitalism... nothing more, nothing less. VW offers you a good... wanna buy it? Here's how much it's gonna cost ya. Why is that so difficult?

 

[Dozenspeed]

Don't forget: If you were living in 1970s China, you likely wouldn't be allowed to buy a Soviet car at any price. That thought makes even American car selection look like paradise.

 

[VeeDubTDI]

I think the Passat has good value, too. Sorry Tom - not sure what you're so upset about.

 

[ruking]

LOL! Love it or leave it. Don't ever demand anything better. That is the EASY way through life.

As I said, Audi, not cheap ass American crap.

I left Pontiac after a family tradition since the 50's in 2000 to go to VW because they had a QUALITY product, with great German Engineering and workmanship, and economic prices and now I feel they are pandering for sales numbers instead of what they have been for years.

I just asked if anyone else felt this way. I don't usually follow the mob or crowd mentality and that is good. This is a 13 year, 5 vehicle VW customer they are losing.

BTW, I enjoy the Jeep, with the MB 3.0L V6 Diesel and automatic transmission, for it's drive train performance. The DSG combined with the ECS, Traction control and anti slip just acts too skidish (sp?) for me.

Your post is confusing or perhaps you are confused. Some of VW's stated reasons ( over recent years) for both the Jetta decontenting AND the US Passat plant in Chattanooga, TN ( for US markets only) was to specifically BOOST US sales figures !! VW has made no secret of it. VW have taken and continue to take aim at Toyota's/Honda's Camry/Accord: and Corolla/Civic Indeed maximum capacity @ the Passat plant in Chattanooga, TN I once read is 800,000 units per year.

Euro VW sales and Euro devaluation was pretty simple for VW management to to see and are both one reason and one advantage for a US plant..

 

[IndigoBlueWagon]

Did VW say it would lower the car's price, or that it would lower the manufacturer's costs? Very different things. And it's also far more complex than the exchange rate. Two examples: Many Passat components from from Euro currency countries, and VW has the huge capital cost of a new plant in Tennessee to recover. Who knows what currencies they use to pay their bills, either.

As others have posted, cars are priced at levels that makes them market competitive. What the car costs to build is almost irrelevant. Margins on the NMS might be higher than they were on the B6. Just like they're probably higher on a Jetta sedan than a Golf.

Re-stating prices based on exchange rates is somewhat bogus anyway. The example that always bugs me is "in the UK people pay $7.50 per gallon for diesel." Well, no, they don't. They may pay 1 pound 41 for a liter, but how they compare that price to income levels, how much fuel they use, what other items cost, and so on may make the comparison between US and other currencies meaningless.

I always felt that I was getting acquainted with another currency when I stopped converting. When I could look at an item and say it was worth a Euro or Pound without thinking about the conversion to dollars, I knew I was getting adjusted.

Rambling aside, don't even think about exchange rates. Look at the car, compare it to others, think about what you can afford. And buy it, or don't.

 

[mnelsonx]

The very title of this thread is an indictment capitalism, intentional or not. I'm sure it wasn't intended that this be a discussion of economics, but it can't be avoided in order to answer the question posed in the title.

If any company that puts a product in the market to make a profit is "cheating" the people who buy it, then we are talking about every company that is still in business today...those who weren't able to make a profit have gone out of business (let's not talk about bailouts, etc.). There are pricing models companies can use that are "cost + profit" to set pricing, but they are a very narrow way to look at it and don't factor in the thousands of market conditions that impact the business environment. Usually they'll generate several pricing models to find the price points that make sure they have factored in the known market conditions and will meet the sales goals for the product.

As a potential buyer, you have a choice of many different models at different price points, with different values to you in your situation. Some people value things outside of the product itself, such as zero landfill facilities, Leeds platinum certification, etc., but in the end it should be about what economic value is best for your situation.

If you choose not to buy based on a perceived "cheating" on pricing, it seems misguided to me; I would buy the product at the best value to me, not some perceived unfairness. VW chooses price points the same as anyone with products in the market - where their product will be competitive and they think they can sell the number of units that they are targeting. If you're trying to punish VW by not buying the product that best fits your needs, in reality you're punishing yourself; VW will be OK either way.

 

[TDI2000Zim]

There is a sure way to buy a car at its real market price:

buy the car after 6 to 12 months of use.
​

Cars depreciate the most in the first 6 to 12 months.