Sometime around last month, the turnaround of Volkswagen’s U.S. operations was supposed to start. Its 2015 Golf was named “Motor Trend Car of the Year,” which has a value beyond what millions of dollars of adverting can buy. The honor was the best hope VW had to draw consumers to showrooms. However, VW’s February sales fell 5.2% to 25,710.
Source: courtesy of Volkswagen of America
The Golf does have a number of qualities to recommend it, which is why VW management must be vexed. The model line has most of what makes an economy car line successful. The base model has a retail price of $17,995. The Golf has a clean diesel model, called the Golf TDI, which is unusual. Clean diesel has not been much of a selling point across the U.S. market. Yet, it does get 45 miles per gallon. As the fascination and demand for electric cars grows, VW has put itself in a position to be successful with the e-Golf plug-in. The line also has the equivalent of an inexpensive sports car: the Golf R.
VW’s challenge is not sales of the Golf, which are up. It is that they are up far too little. In February, sales of all Golf models rose 137.8% to 3,921. The sales results for such a heavily promoted car have to be much better for VW to claim it can leverage advantages into success. It is safe to say that a drop of 5.2% a month will not turn into a big 2015 gain. The math has tilted against a 2015 VW turnaround.
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Additionally, VW cannot escape the abysmal results from sales of its other products. Sales of its best-selling line, the Jetta, dropped 9.2% to 10,811. VW does need a model line that sells 10,000 units a month, even though that would not give it a model among the top 20 selling cars per month in the United States. That distinction goes to models that have monthly sales of 15,000, at least. Sales of 10,000 a month are not extraordinary, but they are necessary.
VW’s share in Europe is 25%, which puts it easily in the lead. It is one of the best-selling brands in China. Those things have not translated into the American market at all.
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