VW Considers a Full-Size SUV for Fat, Dumb Americans
By Chris Haak
Of course, the headline is written tongue-in-cheek. I’m a proud American and think we live in the greatest country in the history of the world, and I’m thankful to be here. But Volkswagen is very keen to increase its paltry share of the US market, and one way that its new CEO Jonathan Browning sees that it might do so is by expanding its SUV offerings beyond the compact Tiguan (which sold 20,946 units during 2010) and the slow-selling Touareg (which sold just 4,713 units during 2010). Specifically, in Berlin, Browning told Bloomberg
We will be looking to really grow, particularly in the compact SUV segment. Over time, I think there’s also scope for growth in terms of a larger SUV within the portfolio.
It’s very hard for me to witness the latest products that VW has developed for the US market and not be insulted by the way they seem to show VW leadership’s perception of the taste of American consumers. This just adds to my annoyance.
Let’s take the all-new 2011 Jetta. The car, which in its previous generation was well-regarded as a premium compact offering (albeit one with some quality concerns) that cost a little more than some competitors, but also gave you more than its competitors. The 2010 Jetta offered independent rear suspension, soft-touch interior materials, and high-tech powertrain choices such as a turbocharged direct-injected gasoline engine, fuel-efficient turbodiesel, and dual-clutch gearboxes. But the car’s higher cost (and, likely, its troublesome repair history) conspired against the car’s sales aspirations, and it remained little more than a niche player in the compact sedan segment.
So instead of considering a move to lower the car’s costs by producing it locally in the US, carefully engineering the car so that cost-reduction measures are invisible to consumers, and creating a vehicle with interesting, dynamic styling, Volkswagen did exactly the opposite of those three things. The 2011 Jetta, while keeping its predecessor’s outstanding drivetrain (I sampled a 2011 Jetta TDI DSG a few months ago, and the little diesel is quite an engineering feat, and works great with the DSG) lost the premium interior (the dash is now made of hard plastic), and the car’s design took a turn further toward the mainstream. Most models also lost their independent suspension in favor of a twist beam.
VW is not building the Jetta in its new Tennessee plant, but will reserve that for its soon-to-be-introduced midsize sedan. So basically, VW made the Jetta bigger and cheaper, hoping that it would appeal to dumb Americans, because we want our cars big and cheap, and we are too ignorant to notice the obvious cost-reductions that Volkswagen undertook with the Jetta. In short, the car illustrates what VW thinks it knows about Americans.
The so-called NMS, or New Midsize Sedan, will be built in VW’s shiny new Chattanooga, Tennessee facility, and hits dealers in the third quarter of this year. This car, which will receive a proper name along with its debut in Detroit, has already been seen around the Internet on spy photos, and it looks just as bland as the Jetta, only one size larger. The intent is, again, to dumb down the Passat – which only sells here in small numbers – by making it bigger and cheaper, with less character. None of us has poked the plastic or in the interior of the NMS, but it’s probably a safe bet that it’s not going to lead the class as the old Jetta and Passat did.
This brings us to Browning’s comment about selling SUVs in the US (he’s using the term loosely to include crossovers that look like SUVs as well). He’s noticed the obvious, that VW has just a tiny share of the US SUV market; 3.3 million SUVs and crossovers were sold during 2010. That makes VW’s share of the SUV segment just 0.76 percent of the market, against VW’s 3 percent overall market share when looking at the overall market.
Wouldn’t it seem to make sense for VW to better compete in the SUV segments that it does participate in – with the Touareg and Tiguan – and build on those models’ sales rather than pulling a Kia and offering a large SUV to Americans who are moving away from them into crossovers? Honda sold 203,714 CR-Vs during 2010; the CR-V is the top-selling SUV, and the entire Volkswagen lineup’s sales of 256,830 cars and SUVs was just 53,116 more vehicles than Honda sold CR-Vs alone. Kia sold 9,835 Borregos during 2010, and Kia’s sales volume is about 100,000 more than Volkswagen’s in the US.
Instead of focusing on bigger, dumber vehicles for US consumers – and particularly as fuel prices climb past $3.00 USD per gallon - Volkswagen should focus its efforts on the true growth segments in the SUV market – and that means smaller, more fuel efficient vehicles. When VW’s heavy and expensive Touareg isn’t big enough for US consumers (in the eyes of Volkswagen’s product planners, at least), and that only sells in small numbers, how would a larger one sell amid $3 and $4 USD gas prices? And will US consumers wise up and stop falling for shiny dashboard plastic objects?