Volkswagen's Play for AmericaDavid Welch
Finally, Volkswagen AG seems serious about really growing in the U.S. car market. The German media says the company is scouring the U.S. for a big patch of land to build a factory. This will not only be welcome news for whatever state gets the factory (in this economy, new manufacturing jobs are just a wee bit scarce) it’s good news for VW dealers. Once the company commits production, then they have to actually design, engineer and price their cars to sell to Americans. VW hasn’t done that very well since they launched the first Beetle here.
This is a big move from the German carmaker. Usually when VW says they’re making a push in the U.S., it means little more than a big ad campaign. They shock us with nasty car wrecks or grab eye balls with leggy vixens. The result: declining relevance and paltry market share of 1.4%.
Meanwhile, Volkswagen says it wants to take on Toyota. Well, to do that VW needs two big changes to its line. First, the cars are just too expensive. Since VW thinks it can eventually topple Toyota, its brass should take note that a basic Camry starts at $18,570 and a new Passat (also with a 4-cylinder motor) starts around $24,000, according to Edmunds.com. You can get a loaded V-6 Camry for around $25,000. A U.S. plant might help, since cars imported from Europe become pricey given the dollar’s weakness these days. Next, VW needs to boost quality, which hasn’t exactly been the company’s calling card. Maybe a new plant would give VW a clean sheet to start from, but it also means a virgin workforce. Nissan tried that at its new plant in Mississippi and had plenty of quality issues with the trucks built there. In other words, Toyota doesn’t have too much to worry about.