ST. HELENA, CA—The numbers don’t lie, but sometimes they don’t make a lot of sense, either.
On one hand, Volkswagen is seriously challenging Toyota and General Motors for the No. 1 ranking in Global auto sales. However, in North America, VW only ranks 12th in sales with a 2.7 market share.
Those facts jumped out when Jonathan Browning, president and CEO of the Volkswagen Group, North America, gave a state of the company assessment while addressing the automotive media here just before Labor Day.
VW’s US sales peaked at 569,292 in 1968, then dropped precipitously for 35 years before shooting up over the last three years, doubling to 438,133 units, a trend the company is intent on maintaining. So far this year, that seems to be happening. While overall car sales are up 7.1 percent in North America, VW’s are up 12.3 percent.
“Going back to 2010, we concentrated on introducing our [current] core products,” says Browning. “Now the goal is to sustain that momentum while looking to renew and expand the lineup in 2015 and beyond.”
Part of that plan is improving quality and the customer experience and by having dealers expand their facilities. Locally, the new Kelly VW dealership in Danvers is cited as an example by VW executives both in the US and Germany. On the quality front, warranty claims have dropped by 47 percent since 2010, says Browning.
Worldwide, VW was No. 3 in sales during 2012, a position it has retained in the first half of 2013 with 4.798 million sales, trailing No. 1 Toyota (4.911 million) and No. 2 General Motors (4.852 million).
Globally, VW has an 8.4 percent market share, with larger slices of the automotive pie in China (15.6 percent) and Western Europe (12.7).
In the United States, Volkswagen has made its reputation by manufacturing high quality small vehicles. The company does well with its core products, especially the compact Jetta and midsize Passat.
However, it doesn’t have a stake in the lucrative North American pickup truck market and its SUVs (Tiguan and Touareg) and minivan (the being-phased-out Routan) haven’t gained similar sales acceptance.
Jetta accounts for 34 percent of North American VW sales followed by Passat (23 percent), the Beetle (11) and Tiguan (7). Even though the current Jetta is in its fourth year on the market, its sales remain strong. The Passat isn’t far behind, now averaging 10,000 sales per month.
Usually, automobile manufacturers invite the media to attend the launch of an important model or series of models.
Volkswagen, in its unique way, instead hosted a Full Line Drive around the Napa Valley to showcase mid-cycle upgrades, two promising new engines, and the line’s new Car-Net connectivity system. (See accompanying story on some of the vehicles we took on the roads.)
“Ford gained considerable traction by marketing its EcoBoost (turbocharged) engines,” says Doug Skorupski, VW’s technical strategy manager, “but the fact is that Volkswagen already has been doing the same thing worldwide for years.”
VW has introduced a pair of new engines, the 1.8- and 2.0-liter TSI that are in their third generation of development. The 1.8 produces 170 horsepower, the same as the 2.5-liter it’s replacing as the volume engine in the Jetta. The new engine (in a Jetta) produces 184 lb.-ft. of torque (compared with 177 for its predecessor), cuts 0-to-60 time from 8 seconds to 7.3, and improves highway mileage from 31 mpg to 36 and overall mileage from 26 to 29 mpg.
One of the keys to the new engine is an innovative water-cooled, one-piece cylinder head and exhaust manifold. That was explained by Hubertus Lemke, head of technical projects, who flew in from Germany for the presentation.
The breakthrough came from being able to cast it as one piece, allowing for quicker warm-up on one hand and a cooler exhaust temperature on the other, two factors that contribute significantly to improving fuel economy.
Coming next year will be a new diesel, at a time when other makers are looking for a bigger slice of that market.
“We have 75 percent of the US diesel market in passenger cars and SUVs,” says Browning. “Eighty-four percent of the Jetta Sportwagens we sell are diesels and, in July, 39 percent of our Passats were sold with that TDI engine.”
A key part of VW’s strategy is to have global vehicles. The company began in the ’90s by designing platforms (engine and chassis) that could wear various bodies. That’s evolved to include assembly kits of pre-built components and platform designs that have the same engine position and mounts so various powertrains can be offered. Continued...