The sporty Golf R model.
Volkswagen of America is hoping the introduction of the all-new GTI and Golf models — as well as revisions to the Jetta — slated to reach in showrooms this spring will help reignite the brand’s sputtering sales in the U.S. market.
The seventh-generation Golf is already a hit in Europe but VW decided to delay its North American launch a year, a move many analysts believe contributed to a sharp decline in its U.S. sales last year after several years of rapid growth.
The surge began in 2010 and saw VW sell more than 400,000 units in the American market for the first time in 40 years. But progress stalled last year as sales plunged 7% despite the overall U.S. market reaching its highest point since before the recession began. The downturn was considered a major factor behind the ouster of Volkswagen Group of America CEO Jonathan Browning, even though the maker’s smaller Audi brand achieved a Cinderella-like comeback that saw it set all-time U.S. sales records.
(VW sales tumble again in January. Click Herefor more on last month’s sales freeze.)
Browning, a long-time industry figure, has been replaced by a veteran VW executive, Michael Horn. Since mid-November, VW also has a new vice president of marketing, Vinay Shahani, a former Nissan executive who was selected after a long search, to replace Tim Mahoney, who moved to General Motors.
Shahani told reporters during a meeting at the Chicago Auto Show that the launch of the new GTI and new Golf, as well as the electric version of the Golf, are critical to VW. “It’s going to be an interesting year for Volkswagen,” said Shahani, who noted that the GTI will be called the Golf GTI in the United States.
(VW nudges past GM to become globe’s second-largest automaker. Click Here for more.)
Besides bringing on new product, Volkswagen also needs to refine and retool its messaging strategy. VW’s advertising in recent years has been very entertaining but it hasn’t communicated the very positive attributes of Volkswagen’s German-engineered vehicles, the executives conceded.
Thus, Volkswagen’s Super Bowl ad, with engineers getting the wings of angels, also included the blunt fact that there are more VW vehicles on the road with over 100,000 miles than from any other brand. Going forward VW’s goal is to continue combining a bit a humor with facts that illustrate the basic strengths of the brand’s vehicles and engineering.
(VW getting into “hot hatch” game with new Golf R. Click Here for a closer look.)
Shahani also said VOA is looking forward to the launch of the new “CrossBlue” crossover, a model expected to fill a wide gap between the current Tiguan and Touareg utes. Sales of utility vehicles have soared but Americans, for one reason or another, have never warmed to the two VW models. Despite generally positive reviews, the Touareg is probably too expensive to compete effectively against alternatives such as the Ford Explorer or Hyundai Santa Fe, added, Shahani, who noted three-row utility vehicles – such as the planned CrossBlue — are replacing the minivan as a family vehicle.
“The Touareg is a wonderful vehicle with lots of features but it’s more like a luxury vehicle than a mass market vehicle, he said.
Browning, who left VW in December, had said during the LA Auto Show that the final decision to go forward with the Cross Blue would be made before the end of 2013. It has been postponed, however, as VW waits for the results of a vote on union representation at its new assembly plant in Chattanooga, Tennessee. The balloting will take place next week
Shahani also said he hopes to do more to promote the new Beetle. The third version of its iconic Bug did moderately well last year, selling more than 43,000 vehicles—but that’s less than 10% of what the original did at its peak four decades ago .
VW was one of many manufacturers to make news at the Chicago Auto Show this year, but rather than launching a new product, it announced it is teaming up with Andretti Motorsports to use the Beetle in rallycross racing.
Michael Andretti noted the rallycross series, which is sort of like the X-Games of motorsports, has attracted a great audience of younger buyers from the Millennial Generation, which is one of the reasons he jumped at an opportunity to enter into a partnership with Volkswagen.
The series now has a new television contract with NBC, which most certainly will boost interest in the races.
Shahani said the series will offer a great opportunity to promote the Beetle. “The Beetle is a great canvas to use to interject some excitement into our line,” he explained.
(Click Here for the full story on the VW/Andretti racing program.)
Volkswagen has a LOT of work to do in the U.S. if it ever wants to be a real player and sell a million cars per year here.
The silliness the marketing people dream up such as the change from the Golf name to the Rabbit name in the U.S. and then years later back to the Golf name and now the Golf GTI instead of just GTI are laughable. The money they spend on this foolishness shows how little they understand the market and their potential customers.
The world has changed a lot since the days of the Beetle and air-cooled engines. VW will never see those sales numbers again in the U.S. from a few models. Increasing the model offering is nice up to a point. If the overall ownership experience isn’t positive, few people will become repeat buyers and I believe that is what the issue is at VW U.S. They tend to view their participation in the U.S. market through rose colored glasses and then they can’t understand why all other major auto companies surpass them in U.S. sales.
Andretti Racing and VW Beetles in rallycross should be a sad marketing exercise for VW unless they are willing to spends many millions as Ford and others have done to build true rally race cars for this series. If they do then the race cars certainly will only be VW shells with all internal race components.
While the rallycross series has a TV contract it ain’t all that interesting to watch, IME. VW has never taken racing seriously in the U.S. and it is reflected in their sales numbers.
As if to illustrate my point about VW not taking auto racing seriously in the U.S. Toyota is spending $400 million with Daytona International Speedway to convince U.S. consumers they are a U.S. car maker. VW spends over $800 million in marketing in the U.S. every year and probably a million or two go towards motorsports marketing. VW just doesn’t understand the U.S. market nor it’s culture. They never have.