Volkswagen's aggressive strategy pays off in U.S.

[Merc1]

German automaker also generates big gains worldwide


Sales of Volkswagen vehicles, ranging from VW-brand cars to Bentley limousines, rose 14.6 percent in the first five months of 2011 to a record 3.4 million. VW sales climbed even faster in its big new target market, the United States.

Volkswagen's U.S. sales are up 18.5 percent so far this year, bolstered by strong demand for its new affordable VW Jetta compact.

The German automaker has redesigned and repriced two key models in its U.S. lineup, the Jetta and midsize Passat, to compete directly against the best-sellers in those segments.

As part of a plan to become the industry leader, Volkswagen aims to boost its U.S. VW-brand sales to 800,000 by 2018 and its groupwide sales, including Audi, to 1 million.

In the first five months of the year, VW's North American sales totaled 261,600 vehicles, including 172,400 in the U.S., where its growth outpaced the market's 14 percent rise.

VW also recorded big gains in Asia and Europe, which account for nearly 80 percent of its sales. VW sold 1.04 million vehicles in Asia, up 21.6 percent, and 1.56 million in Europe, where Volkswagen ranks No. 1.

Volkswagen, the first global automaker to invest heavily in China in the 1980s when the economy opened up, sold nearly twice as many vehicles there as in its next-biggest market.

VW's China sales rose 18.4 percent to 921,100 vehicles in the January-May period, while its sales in Germany totaled 475,100 vehicles, up 8.7 percent.

"The Volkswagen Group, with its very convincing model range, is benefiting from brisk demand in global automobile markets," said Christian Klingler, VW's sales chief.

VW gained momentum last month, boosting global sales by 17.4 percent to 708,900 vehicles, and U.S. sales by 24 percent.

"They've got a very aggressive strategy, and they're coming out with very aggressive pricing," said analyst George Magliano at IHS Automotive. "And it seems to be paying off for them."

The redesigned Passat, built at a new $1 billion Tennessee plant, starts around $7,000 less than its European-built predecessor. VW shaved the starting price of the new Mexican-built Jetta by around $1,700.

While some critics clamored that VW stripped too much content from the car, Motor Trend magazine rates the Jetta behind the Hyundai Elantra and Honda Civic compacts, but ahead of the Toyota Corolla, Chevrolet Cruze and Ford Focus, Executive Editor Ed Loh said.

Jonathan Browning, chief executive of Volkswagen Group of America, told reporters this month that while base prices for the new Jetta are lower, the median prices are equal to those of its predecessor.

From The Detroit News: Autos Insider | Volkswagen's aggressive strategy pays off in U.S. | The Detroit News



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[wookieecrisp]

Jonathan Browning, chief executive of Volkswagen Group of America, told reporters this month that while base prices for the new Jetta are lower, the median prices are equal to those of its predecessor.

That's interesting, because more than one journalist has pointed out the decrease in quality over the older model. Needless to say, the new Jetta is very sharp looking. In its class, I think only the Focus matches it in looks.
Not everyone shares my opinion, but I think the new Passat also has really hit the target. VW's goal doesn't seem too unrealistic at all, especially with how well Audi is doing.