Would Volkswagen Really Leave the US?

Discussion in 'OT Driven' started by TriShield, Jul 19, 2007.

  1. TriShield

    TriShield Super Moderator® Super Moderator

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    A last-ditch drive must correct disastrous turns to make the U.S. profitable again

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    Farfegfailin

    Volkswagen's experience in the U.S. has always been one of highs and lows. But rarely have its fortunes sunk so low as now. Less than a decade ago, the quirky reinvented Beetle helped VW come roaring back from a previous crisis. But for the past three years, its U.S. operations have lost close to $1 billion annually.

    Now it's trying again to save the brand in the U.S. To head U.S. operations, it's bringing in Stefan Jacoby, a German with close ties to VW Chairman Martin Winterkorn and Supervisory Board Chairman Ferdinand K. Piëch, who took control of the company this year after a shakeup that left Porsche as VW's controlling shareholder. Jacoby, 49, an accountant by training, made his mark as head of VW's global sales and marketing. Since Jacoby took charge, the company boosted its European market share to 20.3% from 18.1%, helping keep it solidly in place as the Continent's leading brand. With its U.S. fortunes in long-term decline, Jacoby is facing his biggest challenge yet. His mission: to meet Winterkorn's target of breaking even in the U.S. by 2009.

    Only a year ago, VW was gearing up a huge marketing campaign to relaunch a revamped Rabbit and Jetta in a bid to recapture its niche as the affordable, stylish European car of choice for younger buyers. VW hired former MiniUSA marketing chief Kerri Martin, who recruited super-hot U.S. ad agency Crispin Porter + Bogusky. The plan, as chronicled in a BusinessWeek cover story (May 22, 2006), was to create a VW renaissance.

    It didn't work out that way. A string of attention-grabbing ads—one campaign showed people surviving crashes unscathed and another starred a German dominatrix named Helga—did little to juice sales of VW's two most important models, the Jetta and the Passat. "I've never seen a brand struggle so hard to understand the U.S. market and fail so miserably," says Rebecca Lindland, a director at consulting firm Global Insight Inc. VW's sales slid to 235,000 last year, from 338,000 in 2002. Martin left last December, part of a shakeup when Porsche took over.

    Making matters worse is the perception in the U.S. that VW's quality lags vs. its Japanese rivals. VW's interiors, for example, don't stand up to the kind of abuse they get from U.S. drivers, who do a lot more eating, drinking coffee, and applying makeup in their cars than Europeans do. That's one factor in J.D. Power & Associates Inc. (MHP ) ranking VW in the bottom 20% for reliability, quality, and service. "That really hurts VW when its young customer base does so much online comparative shopping," says Power Information Network analyst Tom Libby.

    To turn operations around, Jacoby has to battle the punishingly high euro and VW's limited manufacturing presence in North America. Even more important, the company needs to introduce new models that build on its long tradition of quirkiness and connect with U.S. consumers. Instead, the carmaker's more recent offerings feel bland. Dealers think VW blew a golden opportunity when it chose not to introduce an updated version of the wildly popular Microbus from the '60s and '70s. Instead, the company is launching a repackaged, Volkswagen-branded, Chrysler (DCX ) minivan. Casey Gunther, VW's top-selling U.S. dealer, in Coconut Creek, Fla., is worried. "We're missing the funkiness" that U.S. buyers expect from VW, he says. "The Germans don't understand." And unlike in Europe, affluent buyers don't see VW as an aspirational brand.

    Winterkorn vows the turnaround of the U.S. business is his "No. 1 priority." But there's only so long any management can put up with nearly $1 billion annual losses. Says one executive close to VW: "For the first time in some time, the phrase If we are to stay in the U.S.' precedes a lot of conversations at VW."

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  2. Parhelic

    Parhelic Blue Member

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    they would have made some more money if they approved my loan for a new GTI :mad:
     
  3. Freakin' Rican

    Freakin' Rican New Member

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    I kinda want a rabbit since my MKIII VR6 is dying. :hs: :o
     
  4. LSD

    LSD knowledge is good OT Supporter

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    boohoo
     
  5. civicmon

    civicmon got all my game from the streets of california.

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    they want to build a factory since the USD has become a steal on the world market.

    and the infrastructure is excellent to open new factories here and pump out VWs solely for export.
     
  6. isaac86hatch

    isaac86hatch This thread sucks

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  7. ChemicalWhore

    ChemicalWhore OT Supporter

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    maybe if they didn't sell overpriced shit they wouldn't be in this situation.
     
  8. Read more...

    Read more... SPQR

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    They're stuck simultaneously trying to move down and upmarket :o

    I think the Phaeton and Touareg were good ideas, as is the Rabbit, etc...

    But they need more emphasis on diesels (which is hard, because states like California and New York make it difficult), quality control, shit like that...Unfortunately they missed the hybrid craze (which was probably their bread-and-butter customer base) as diesels don't get the same attention, although they get similar gas mileage, are cheaper, and are better for the environment, etc...


    Piech should hire me to run VW NA

    In the end, I think this is just a transitional time for VW; they'll come out of it eventually and they're still far stronger than Ford or GM...
     
  9. Jonny Chimpo

    Jonny Chimpo OT Supporter

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    here's a novel concept for VW: Stop wasting time and money developing $90k luxury sedans that compete with Audi and $70k luxury SUV's that try (and fail) to go against BMW, Merc and Porsche. The how about using that money they save to develop coilpacks that don't leave you stranded, window regulators that don't fail in a blizzard, and dealerships that don't act like third world Lada dealers.

    Maybe all that and "powerful" Jetta's and GTI's that don't get near/into the $30k range. *cough*GLI*cough*R32*cough* :mamoru:
     
  10. mtsl500

    mtsl500 New Member

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    so no new Phaeton?
     
  11. Wonder Showzen

    Wonder Showzen Domeshotter

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    lol you make the u.s. sound like a factory toting third world country.
     
  12. quid

    quid I Piss Excellence OT Supporter

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    my MKIII VR6 is for sale right now, and it looks like im going japanese :hs:
     
  13. Chadder007

    Chadder007 OG Diamond Member

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    They have a bad reliability image. The shitty Toureg hasn't helped either.
     
  14. autox

    autox OT Supporter

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    even with a lot of past reliability issues they still have a huge following. I see so many people in their early 20s driving them when they could easily save a lot of money and get car thats probably more reliable and better on gas.
     
  15. DOBERMAN

    DOBERMAN New Member

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    LET THEM GO!
     
  16. cedric

    cedric I don't have a contract

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    :rofl:
     
  17. mtsl500

    mtsl500 New Member

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    it was sheer genius I tell you

    a more expensive VW A8 ... the world was going to beat a new path to their doors
     
  18. pmoney

    pmoney OT Supporter

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    didn't realize they have been losing this much money. i mean its nothing compared to the domestics, but its pretty surprising.
     
  19. Tof-Corey

    Tof-Corey OT Supporter

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    VW has alot to offer, they just choose to deliver boring overpriced packages. The R32 was cool and it would be nice if they offered that on different cars.
     
  20. pmoney

    pmoney OT Supporter

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    what is it unreliable as fuck?
     
  21. tbizzle

    tbizzle you smoke that shit?

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    good riddance
     
  22. DOBERMAN

    DOBERMAN New Member

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    By a lot to offer do you mean ugly cars with non-stop problems?
     
  23. Tof-Corey

    Tof-Corey OT Supporter

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    Phaetons are actually sweet cars, and are actually not all that similar.
     
  24. Tof-Corey

    Tof-Corey OT Supporter

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    No, I mean a loyal fan base, and the ability to make fun cars.
     
  25. mtsl500

    mtsl500 New Member

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    :dunno: I rode in a W12 ... don't get me wrong ... great car ... but seriously a 90K VW :hsugh:
     

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