With only one exception, Volkswagen of America is the least successful big car company with a presence in the United States. And that presence is dwindling as consumers find better alternatives to its products. VW global management says it hopes to pass Toyota Motor Corp. (NYSE: TM) and General Motors Co. (NYSE: GM) as the largest auto manufacturer in the world. Without impressive sales in America, the world’s second largest car market after China, that is impossible.
Volkswagen sold 314,833 vehicles in the United States through September, down from 323,090 in the same period of last year. That means sales are off almost 3% in an American market in which car and light truck sales are up more than 8% for the same period.
Hyundai and its stable mate Kia have done about as badly as VW. Some of their troubles can be blamed on the scandal triggered by the very public confession that the miles per gallon their cars get were inflated. VW does not have a convenient excuse like that one.
At the core of VW’s disadvantage is that the buying public does not think much of its cars. In the 2013 J.D. Power measure of initial quality, Volkswagen was well down the list. In the J.D. Power dependability study, VW’s numbers are even worse.
Another of VW’s problems is its small line up of models. It has only three sedans and two compacts. And it has only two SUV models. Even Subaru, which has sales in the same range as VW, has a larger list of models.
VW cannot succeed in America without a greater number of models and better grades for quality. Its market share in the United States is well under 3%, and that figure is shrinking.