Monday, June 19, 2006

Volkswagen to Cut US Jetta Price

Text from Reuters.
FRANKFURT, June 19 (Reuters) - Volkswagen will cut the price of its Jetta compact car in the United States to help boost volume for what is already its top-selling model in the U.S. market, industry paper Automotive News reported on Monday.

It quoted Adrian Hallmark, executive vice president of Volkswagen of America Inc, as saying the company will remove some features from the Jetta as of the 2007 model year and lower the U.S. price by $1,410.

That means 2007 Jetta prices will start at $17,105 including shipping. The cheapest 2006 Jetta starts at $18,515, it said.

"If we are going to be a volume player, we have to play the volume game," it quoted Hallmark as saying at an event in Germany. "If you look at the price-volume relationship, the decision is really clear."

The move reflects VW's decision to focus on its mass volume image and abandon -- for at least a few years -- efforts to position the brand upmarket to be able to charge more in the world's biggest car market.

It has also cut U.S. prices for the Rabbit, the model sold elsewhere as the Golf. The Rabbit goes on sale shortly with a base price of $15,605 including shipping, down from $16,660.

Hallmark said VW expected to sell about 105,000 Jettas in the U.S. market this year, down from a peak of 145,000 units in 2001.

As previously reported, it has also decided to stop selling the top-end VW Phaeton luxury car in the United States.

"Instead of going for the penthouse, we need a few floors below," Hallmark said.