VW's Head of U.S. operations, Michael Horn, has left

[veeman]

This guy was popular with U.S. VW dealers because he advocated for their needs in the U.S. market which headquarters in Germany were very slow to respond to, namely the need for better product matching U.S. consumer tastes (competitive SUVs).

Things are not going well for VW in the U.S.  Still no fix available for existing diesel cars, still poor product portfolio, - they may not be around in the U.S. in a few years. 

[ifcar]

To think that VW is that close to disappearing from the U.S. market is a little extreme. Passat and Jetta sales have been down, due to age and the lack of diesels, but they're still popular cars. And the new Tiguan will be out before too long and will likely do very well.

A scandal like this could doom an automaker that was already badly struggling, but VW wasn't in that position, and it's not like sales have dwindled to zero even in the short term. The worst I'd expect to see is some individual dealers failing.

[Xer0]

What are GTI discounts looking like right now in the wake of this?


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[GoCougs]

I test drove a Golf R yesterday. The sales dude was their senior person, and he said dieselgate was a disaster for the dealership. Beyond just losing tons of diesel sales VW apparently issued $1,000 "good will" vouchers to diesel owners but it required that owners visit the dealer to "activate" it. The end result was a bunch of angry customers bitching at the dealership when they came in. What a stupid idea.

VW's product is sorta sucky. Take your pick - expensive, doesn't compete well, limited appeal. That all said, VW did have a bit of a coup with the new Passat and new Jetta but the cars didn't receive mid-cycle updates and AFAIK there are no new models on the horizon. VW has to get on 5-year turnover cycles, and stick to them, to expect to make headway in the USA.

[ifcar]

The Passat and Jetta did both get mid-cycle updates. They've gotten new engines and refreshed styling, though VW was way too subtle with the styling tweaks. On the horizon are two new crossovers, a redesigned Tiguan and a larger model. 

It definitely sounds like bringing the customers in to the dealership was a bad idea, though. I wonder if the hope was that it would make people want to buy another VW (probably not going to happen right then), or if they just didn't think it through.

[12,000 RPM]

Company and reliability issues aside, VW has some good product. In particular, the Golf and GTI are class benchmarks, and I imagine the new Tiguan will be as well. There is nothing from the competition that matches the GTI PP with the mechanical LSD or the Golf TSI for the $$$. Jetta and Passat are a little bland but again are quirky in a good way. I see a lot of them around here; not many TDIs either (though definitely a few). If VW can get past Dieselgate and stop dragging its feet on CUVs and regular updates they should be OK. But they have already shown they have no problems playing dirty and not accepting responsibility for it. So I'm negative on them in the short term. Shame as the aforementioned GTI and Tiguan would make for nice replacements in our household, but I just don't have the appetite for that kind of risk with kids potentially on the way.

[veeman]

To think that VW is that close to disappearing from the U.S. market is a little extreme. Passat and Jetta sales have been down, due to age and the lack of diesels, but they're still popular cars. And the new Tiguan will be out before too long and will likely do very well.

A scandal like this could doom an automaker that was already badly struggling, but VW wasn't in that position, and it's not like sales have dwindled to zero even in the short term. The worst I'd expect to see is some individual dealers failing.

I think VW is in worse shape than current sales numbers indicate (which aren't great).  There is a serious threat of a consortium of U.S. VW dealers suing VW (which has probably never been done).  They have tons of unsold inventory, no way to sell it in the foreseeable future, and very poor supply networks (of cars they can sell).  VW dealers are set up like a mainstream automaker and there is talk by VW headquarters of turning VW USA into a semi-premium brand because they can't compete with the domestics or Japanese in the mainstream market.  They're not going under now but I think in 5 years, they may not be around in the USA.  Also VW doesn't need the American market.  The majority of their sales are in Europe and China. 

[ifcar]

I think VW is in worse shape than current sales numbers indicate (which aren't great).  There is a serious threat of a consortium of U.S. VW dealers suing VW (which has probably never been done).  They have tons of unsold inventory, no way to sell it in the foreseeable future, and very poor supply networks (of cars they can sell).  VW dealers are set up like a mainstream automaker and there is talk by VW headquarters of turning VW USA into a semi-premium brand because they can't compete with the domestics or Japanese in the mainstream market.  They're not going under now but I think in 5 years, they may not be around in the USA.  Also VW doesn't need the American market.  The majority of their sales are in Europe and China. 

A number of those problems are going to exist whether VW stays in the U.S. market or not. Pulling out won't help with unsold inventory. Pulling out won't make fines or lawsuits go away. And VW has made long-term investments in the U.S. such as developing U.S.-friendly models and factory capacity.

I just don't think that the company's U.S. operations are struggling as much as you do, or have as little potential as you do. And the problems that do exist mostly can't be solved by discontinuing U.S. sales.

[MX793]

Article I read said that VW wouldn't pull out of the US market, but would abandon their goals of being a volume player and go back to being more of a niche brand in the US.

[12,000 RPM]

If the dealers are stuck with unsold inventory VW saddling them with new model year cars will be problematic

VW is just at the rough end of a market due for a big contraction anyway. 17M cars a year in the US is ridiculous given how long people are holding on to cars and how fundamentally weak the economy is

[Madman]

However bad things are for Volkswagen's US operations right now, the situation is still nowhere near as catastrophic as it was in 1993, when VW's US sales bottomed-out at 49,000 units for the whole year.  At the time, Volkswagen (and Audi) did seriously consider pulling out of America.  It was at this point Volkswagen introduced the Mk III Golf and Jetta and sales skyrocketed.  Although, to be fair, they couldn't have fallen much further.

Volkswagen's currents ills are nothing some class-competitive product couldn't fix.  Such as a couple of long-overdue crossovers, sized and priced against the industry's leaders?  And maybe a Jetta that doesn't appear indistinguishable from the one on sale five years ago?  Or a Passat that doesn't look like a rejected design proposal for the 2006 Chevy Impala?  And how about finally making the Polo and Scirocco available to North American buyers?  Come on, Volkswagen.  We can't buy them if you stubbornly refuse to bring them to market!  It's one thing to try and fail but quite another thing to not even try in the first place.  The truth is Volkswagen hasn't really been trying.  The Golf Mk VII may be good, but it can't carry the whole company.

I hope Michael Horn's replacement turns out to be somebody who understands what it takes to not only survive, but also to thrive in America.

[Soup DeVille]

VW in the US survived the early and mid '80s.

They're not leaving over this.

[Raza]

5 years?

MITSUBISHI still sells cars here.  VW isn't going anywhere. 

[93JC]

Mitsubishi Motors seems like it's just a play-thing for the rest of the Mitsubishi Group.

[2o6]

Somehow, Mitsu USA is making like record profits despite a shit portfolio.

[MX793]

Somehow, Mitsu USA is making like record profits despite a shit portfolio.

Record compared to what?  All time or in recent years?

[2o6]

Record compared to what?  All time or in recent years?

I think in recent years

[MX793]

I think in recent years

Yeah, well, a thousand percent of nothing is nothing.

[AutobahnSHO]

Somehow, Mitsu USA is making like record profits despite a shit portfolio.

I see a lot of them upstate NY. poor man's Subaru?

[MX793]

I see a lot of them upstate NY. poor man's Subaru?

Mitsubishi offers heavy discounts or sweet finance deals and Upstate is pretty economically depressed.  A lot of Hyundais and Kias running around as well.  If you can get a brand new car with a warranty, even a mediocre one, for the same monthly payment as a 4 year old Honda or Toyota that's already showing some rust, a lot of folks will take the newer car.

[12,000 RPM]

Somehow, Mitsu USA is making like record profits despite a shit portfolio.

Dodge Journey had its best sales year ever in 2015 and has had year over year increases since it came out and remained unchanged in 2008. Even through the recession. My guess? Subprime auto loans. Take someone who doesn't give a shit about cars, add in shitty credit, access to a full factory warranty and a (slightly) lower interest rate... suddenly a Mirage begins to make a lot of sense.

As the Fed increases the base rate expect the sales positions of companies like Mitsubishi, Dodge, Kia, Fiat etc to become more and more precarious. Those were the big winners of the recent sales boom. Pulse and a paycheck financing.... I wonder how this story ends