Volkswagen said it will discontinue production of its iconic Beetle. If U.S. sales are any indication of demand, VW almost has to drop the model. The company has made the car for nearly eight decades. And with the pricing of the Beetle alone, it is easy to see why VW killed it.
VW Beetle sales in the United States were 1,399 in August, out of the manufacturer’s total of 32,255. Sales have swung to the Jetta, which sold 10,965 units during the month, and the high-end Tiguan wagon. The Tiguan is VW’s effort to capitalize on the rapidly growing sport utility vehicle and crossover market. VW has added a large SUV, the Atlas, to further increase its bet on this market segment.
Management focused on the Jetta when it announced August results. Derrick Hatami, executive vice president of Sales, Marketing and After Sales for Volkswagen Group of America, said:
We’re happy to see the all-new Jetta gain traction, with sales topping 10,000 units this month. The new model’s bolder design and greater interior space were specifically developed for the American market, so it’s encouraging to see it gain momentum. By adding new technology without raising the cost, we’ve ensured that the Jetta remains a tremendous value to customers.
The Beetle is crowded out of the VW lineup due to its price. The base model costs $20,220. The base Golf is $20,910, the base Jetta sells for $18,454, and the base Passat is priced at $22,995. VW’s fleet has too many low-priced, high-mileage cars during a period when the segment has lost popularity. A good example of this is that Ford has withdrawn from that part of the U.S. market completely.
The Beetle has lost all its sales momentum in part because VW has too many of its own models that compete with it.