VW May Discontinue Rabbit/Golf Sales In US
By Kevin Miller
A recent article in the Financial Times indicates that Volkswagen may halt US sales of the Rabbit hatch because it is unprofitable to sell the European-built vehicle here. Sales may be discontinued in Australia and Brazil for the same reason. It is rumored that the GTI will continue to be imported to maintain its image and heritage.
As we reported earlier this month, VW expects to cut about $1600 out of each next-generation Golf with more efficient production strategies. However, even that amount of savings may not be enough to make the Golf profitable in the US, as the falling dollar continues to make it difficult to profitably sell European vehicles here.
Volkswagen is looking to open a production facility in the US, and the belief is that plant will build the Passat (or similar) mid-sized sedan, as well as possibly the Golf and maybe a smaller, Polo-sized vehicle. US production will help Volkswagen overcome a weak dollar. Until that plant comes online, however, the Golf would be absent from the US market.
This is not good news for Volkswagen sales in the US, as small, fuel efficient vehicles are in high demand because of record gasoline prices. Though the Rabbit is not at the top of its class for fuel economy, it is among Volkswagen’s least expensive and more efficient vehicles in the US. With a goal of tripling sales in the US to 1 million vehicles by 2018, discontinuing the Golf/Rabbit nameplate even temporarily seems to be a contradictory move. Per-vehicle losses are evidently high enough to cause VW to take this step to shore up their financial position in the US.
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