Friday, October 19, 2007

Volkswagen to drop US prices in line with Toyota

Volkswagen has a lot of work ahead of it if its to accomplish its lofty goal of taking the title of world's largest away from Toyota within their self-alloted timeframe of 8 years. With that in mind, Volkswagen CEO wastes no time in laying out a plan on exactly how to accomplish said goal. He has announced that Volkswagen will be dropping prices in the US to be more in line with Toyota. To put things in perspective, the Corolla and Camry costs US$15,200 and US$20,000 respectively. The Jetta and Passat, however, costs US$17,000 and US$23,900 respectively. That's an US$1,800 premium over the Corolla and US$3,900 premium over the Camry.

Of course, this does not come without a few shortfalls. That means major decontenting across the board. According to Winterkorn, US bound models have suffered from "too many added technical items that [Americans] don't want to pay for" citing the folding sideview mirrors as an example of one item they may exclude from US spec vehicles.

And, let's not forget about that plant Volkswagen wants to build on US soil. Producing locally will enable Volkswagen to eliminate importation duties and exchange rate differences.

Ultimately, Volkswagen wants to sell a million vehicles annually by 2018. Price reduction is a small step in the right direction but reliability is also a pressing issue that needs their immediate attention.

No timeframe was given as to when we can see prices go down, but considering their 2015 goal, I'd reckon very soon.

Source: Wall Street Journal

8 Comments:

Anonymous Anonymous said...

If they decontent the cars to turn them into cheap Toyota imitations, I think my days as a VW customer are over. I expect things like folding sideview mirrors, along with a number of other technical features. The Mark V cars are already cheapened over what they were when they were introduced, any more cheapening will make the cars unappealing.

Fri Oct 19, 11:58:00 AM  
Anonymous Anonymous said...

Amazing! The Canadian dollar has gone past parity with the US dollar, yet in Canada we have price increases and in the US there are price decreases. VW needs to fire their current staff that sets prices.

Fri Oct 19, 12:08:00 PM  
Anonymous Anonymous said...

To accomplish the goal of overtaking Toyota, the vehicle price drop is one aspect. But they still need to address vehicle reliability, service quality and parts availibility/pricing. VW still has a ways to go, but I'm hopeful.

Fri Oct 19, 12:27:00 PM  
Anonymous Anonymous said...

yep too bad VW seems to forget Canada and that Old Agreement from the 50's to save 100 Quebec jobs screws Canadians to this very day

Fri Oct 19, 07:11:00 PM  
Anonymous Anonymous said...

WOW....i guess i won't be buying VWs anymore either. they're making a big mistake....they have to realize that a majority of the check writers for VWs in the US are 35-60 yrs old and engineering meens nothing to them b/c they drove a bug that had 4 wheels standard....a lot of my younger customers see the value in the Jetta over the Corolla when you explain it to them and price is no longer an issue.

With the popularity of a lease VWs become even more affordable. i think they need to be patient and realize that the next generation of buyers will have a different perception of Volkswagen and will not know what the originial Rabbit or Beetle were..most of them will never see one in person....if VW wants to be more profitable in the largest car market they need a factory in the US. period. more models are also key. you can't rely on the Jetta for showroom traffic. the Passat's image is very shadowy....younger buyers don't like it b/c it seems to much like a boring family car....older buyers think it's to business like...professionals love it but the only problem is that they usualy drive company cars....Touareg needs to grow in size a bit and price would not be an issue....

with Audi's steady growth in the US i don't see why they can't share a plant with VW to build Cayennes, Q7s and Touaregs.

i could go on for days...but building shittier cars is not the answer.

i'm on the frontline everyday...if the Passat was $20,000 sales would be the same. VWs biggest enemy is Consumer Reports...price means nothing if you don't like the car.

what VW has been doing buy advertizing price point cars works in essence b/c no one ever goes for those models. they always step up in equipment.

CHANGE THE PERCEPTION OF VOLKSWAGEN IN THE US MARKET!!!

Sun Oct 21, 07:08:00 AM  
Anonymous Anonymous said...

I don't get that... people buy VW's because they are unique and have clever features. Once you take those away, why not just buy a Hyundai or Toyota really?

Folding sideview mirrors are hardly a technical item that we should be "paying" for. What rock does Winterkorn live under? Kia Spectras come with folding mirrors!

Sucking content out of the cars is not the answer vw.

Tue Oct 23, 04:26:00 AM  
Anonymous Anonymous said...

I purchased my first VW in 1999, Passat 1.8 triptronic with 10 YR. 100,000 Warrantee. I love fact that a lot of thought went into the features, the engineering is one of the largest selling points with the features as the added items to keep the car interesting.

Since then I have had a 2002 Jetta TDI, 2005 Passat 1.8 and now a 2007 Passat 2.0. I really think the latest Passat model has improved, sporty sedan at a reasonable cost.

VW problems with quality issues need their attention, moving their headquarters to Washington DC does nothing but raise their burden rate on every vehicle they sell.

Bringing cars out on time with good features would put people in the show rooms.

VW Ivory Tower management is like musical chairs, every change results in four steps backward before they make progress.

People buy VW because they can have German Engineering at a more reasonable price than a BMW or Mercedes.

A very wise man once said, "You know the cost of everything and the value of nothing". Why VW hasn't listened to their dealers telling them over and over again what their customers wanted makes no sense.

It costs six times as much to attract a new customer compared to keeping your existing customers. The media ads are sophomoric at best. People want to know the details, they will get the prices if they are interested in the details.

I am hopeful the New Head of VW will start focusing on Quality, on time launches of new models and keeping standard features while coming up with better ones than the competition.

J.M.H.
Park Ridge, IL

Fri Nov 16, 02:22:00 PM  
Anonymous Anonymous said...

Have to agree, if VW decontents any more, why buy them vs Toyota or GM or Ford etc. We buy VW's because they're 'special'

Wed Mar 12, 08:48:00 AM  

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