In an article published this week by Automotive News, Volkswagen’s sales slowdown in the United States this year is quite heavily overstated. And their graph showing 2013 sales plummeting even below the 2009 mark is vastly exaggerated, as VW sales are down slightly this year, -4% in a market that’s up 8%, after sales have doubled from 2009 through 2012. I can imagine, if Volkswagen wasn’t aiming for a bold 800.000 US sales by 2018, up from 230.500 in 2007 when the goal was set and still up from 438.000 in 2012, nobody would have taken a second look at sales flattening after three years of impressive growth. Still, the temporary flattening of sales shouldn’t come as a surprise when taking in consideration the reasons behind the sales surge.
Why Volkswagen sales have surged in the USA
Volkswagen have realized that they would never make it to 800.000 sales trying to be a (semi-)premium brand, with prices of their core models 10-15% above comparable US and Japanese models, for vehicles that were developed for the European market instead of the US market. Also, currency fluctuations between Dollar and Euro have made it difficult to make a profit on European-built cars, unless you can charge a premium, like BMW, Mercedes-Benz and Porsche. To deal with these issues, they have expanded their manufacturing capacity in Mexico opened a new production facility in the United States to build cars that are better suited to the North American market.
For example, when the new generation Jetta was introduced in 2010, prices were lowered to directly compete with segment leaders Toyota Corolla and Honda Civic. As a result, sales surged from 108.427 in 2009 to 177.360 in 2011. [Read more…]