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VW goes after volume, cuts Jetta price
Automaker will try moving upmarket in U.S. at later date
queryvar="vw,goes,after,volume,cuts,jetta,price";Automotive News / June 19, 2006 - 6:00 am
Adrian Hallmark, executive vice president of Volkswagen of America Inc., said lowering the price of the Jetta, VW's biggest seller in the United States, is part of the brand's return to its volume image. VWoA will abandon attempts to move sharply upscale, at least for a few years, Hallmark said.
"If we are going to be a volume player, we have to play the volume game," Hallmark said at a press event here. "If you look at the price-volume relationship, the decision is really clear."
VW dealers agreed to reduce profit margins to support the move.
Hallmark confirmed that 2007 Jetta prices will begin at $17,105, including shipping. The cheapest 2006 Jetta starts at $18,515, including shipping.
Hallmark said the base 2007 Jetta will not be a totally stripped model. VW can't remove features such as antilock brakes or extra airbags. Those items are standard in Europe and would cost too much to remove, Hallmark said.
VW dealers agreed to take a cut in profit margins on the base Jetta as well as the entry Rabbit compact, said Hallmark. He would not disclose the size of the cut but said it is "not more than 1" percentage point.
Hallmark said VWoA also cut its profit margin on the two cars.
Rabbit sticker cut
The Jetta price cut follows similar action on the Rabbit, the next generation of the car that's called the Golf everywhere else in the world. It will go on sale this summer with a base price of $15,605, including shipping. The base 2006 Golf sells for $16,660, including shipping.
The new pricing reflects Volkswagen of America's decision to compete with volume brands, including Toyota, Honda, Mazda and Mitsubishi, Hallmark said.
That represents a turnaround from VW's strategy when it launched the larger, redesigned Jetta in the spring of 2005. Len Hunt, Hallmark's predecessor, said at the time that the Jetta "can actually bridge three segments" -- premium subcompact, premium mid-sized and entry-luxury.
In Germany, VW's efforts to become more of a premium brand "worked far better than in the U.S., where it did not work as well," Hallmark said.
The problem in the United States is that the Jetta's price was comparable to that of larger sedans such as the Toyota Camry, he said.
Jetta sales peaked at 145,000 units in 2001. This year, the first full year of the redesigned vehicle, VW expects to sell about 105,000 units, Hallmark said.
Automaker will try moving upmarket in U.S. at later date
queryvar="vw,goes,after,volume,cuts,jetta,price";Automotive News / June 19, 2006 - 6:00 am
2007 Jetta costs less than the '06
WOLFSBURG, Germany -- Volkswagen is abandoning its strategy of moving the Jetta upmarket and will remove content from the compact for the 2007 model year, slashing the price $1,410.
Adrian Hallmark, executive vice president of Volkswagen of America Inc., said lowering the price of the Jetta, VW's biggest seller in the United States, is part of the brand's return to its volume image. VWoA will abandon attempts to move sharply upscale, at least for a few years, Hallmark said.
"If we are going to be a volume player, we have to play the volume game," Hallmark said at a press event here. "If you look at the price-volume relationship, the decision is really clear."
VW dealers agreed to reduce profit margins to support the move.
Hallmark confirmed that 2007 Jetta prices will begin at $17,105, including shipping. The cheapest 2006 Jetta starts at $18,515, including shipping.
Hallmark said the base 2007 Jetta will not be a totally stripped model. VW can't remove features such as antilock brakes or extra airbags. Those items are standard in Europe and would cost too much to remove, Hallmark said.
VW dealers agreed to take a cut in profit margins on the base Jetta as well as the entry Rabbit compact, said Hallmark. He would not disclose the size of the cut but said it is "not more than 1" percentage point.
Hallmark said VWoA also cut its profit margin on the two cars.
Rabbit sticker cut
The Jetta price cut follows similar action on the Rabbit, the next generation of the car that's called the Golf everywhere else in the world. It will go on sale this summer with a base price of $15,605, including shipping. The base 2006 Golf sells for $16,660, including shipping.
The new pricing reflects Volkswagen of America's decision to compete with volume brands, including Toyota, Honda, Mazda and Mitsubishi, Hallmark said.
That represents a turnaround from VW's strategy when it launched the larger, redesigned Jetta in the spring of 2005. Len Hunt, Hallmark's predecessor, said at the time that the Jetta "can actually bridge three segments" -- premium subcompact, premium mid-sized and entry-luxury.
In Germany, VW's efforts to become more of a premium brand "worked far better than in the U.S., where it did not work as well," Hallmark said.
The problem in the United States is that the Jetta's price was comparable to that of larger sedans such as the Toyota Camry, he said.
Jetta sales peaked at 145,000 units in 2001. This year, the first full year of the redesigned vehicle, VW expects to sell about 105,000 units, Hallmark said.