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Volkswagen says its core VW brand is 'no longer competitive' financially
- amacalac 3y agoCould always take a hit on those old profit margins, lower the prices, and sell ‘em - they’ll fly off the shelves
- nxm 3y agoThose old profit margins are not great these days… that’s the issue
- hilux 3y agoDeliberately and cynically scamming millions of their customers could have something to do with VW's loss of brand value.
- starbugs 3y ago> Deliberately and cynically scamming millions of their customers could have something to do with VW's loss of brand value. It definitely has. But the current issues seem to be more due to a number of other factors. During the pandemic, pretty much every German car manufacturer tried to more or less get rid of their lower priced models and focus on the high end market to increase margins. As far as I know, this was largely driven by supply chain issues and shortages making lower priced models financially less attractive for the car manufacturers. VW is not a luxury brand so they suffered from this more than other German manufacturers. With inflation and recent world market developments (the Chinese levelling up their car manufacturing), this situation has only got worse. But the most important factor may yet be electrification. VW doesn't have an edge in electric cars and their product lines (the ID3, 4 etc.) are not really competitive. They also failed to vertically integrate. German car manufacturing still is largely a supply chain coordination game, making it hard to innovate quickly. Last but not least, I guess the current insane energy policies and quite literally cooling economic environment in Germany don't really help as well.
- einr 3y agoBut the most important factor may yet be electrification. VW doesn't have an edge in electric cars and their product lines (the ID3, 4 etc.) are not really competitive. They must be doing something right because the ID.4 sells like hotcakes in Scandinavia, Germany and other European countries. It was the #1 EV in 2022 in Sweden, and #2 in Germany behind the Tesla Model Y. (ID.3 was #3)
- starbugs 3y agoI guess I should have phrased it differently. Going forward, they don't seem competitive in comparison to Tesla and the upcoming Chinese competition. Selling a lot of cars doesn't mean it's a profitable business. I am quite sure the German government will come up with new tariffs, subsidies and regulations to make it look as if they can continue to dominate the local market though, hurting consumers and the German industry even more along the way.
- einr 3y agoI guess I should have phrased it differently. Going forward, they don't seem competitive in comparison to Tesla and the upcoming Chinese competition. Phrased that way I would generally agree with you. I think not only European, Japanese and Korean brands but Tesla too is in for a bit of a rude awakening once all the Chinese stuff really hits Europe.
- TheLoafOfBread 3y agoThen Chinese stuff will get hit by tariffs, as it was the case with Chinese steel.
- starbugs 3y agoGermany is not the US. We are not energy independent. In fact, we are not independent of anything other then water maybe. Germany is reliant on exports. Tariffs are not helpful there. If you can’t manufacture a product at competitive prices on the world market, Germany has no real business in manufacturing anything anymore unless in a war economy. As a leading economy in the EU you might have the means to stretch that out for some time, but ultimately this makes matters worse in the end. Germany is currently trying to subsidize what remains of the industry at the cost of consumers. This is already causing substantial backlash from consumers, voters and even the federal courts. Good luck with all of that.
- forinti 3y agoVW enjoyed a monopoly in Brazil (along with Fiat, GM, and Ford) for decades. And they obliged by selling the worst cars they could get away with. The last beetle sold in Brazil (1986) was worse than German beetles from the 1950s. Plus, they helped the military dictatorship; probably because it secured their market. I see VW as nothing but evil, but in spite of all this, its brand remains popular in Brazil.
- SCAQTony 3y agoI had two VWs in my life that I truly loved till they had driven 50k miles: A 1980 Rabbit Convertible and a 2000 New Beetle. The styling and handling, but not the quality. After each purchase, I swore I would never buy another. I want to love and own a VW again, but only when the quality is as good as a Lexus, Toyota, or Hyundai.
- iancmceachern 3y agoPlus that whole dieselgate thing, they burned a lot of trust and good will with both their customers and regulators
- Glawen 3y agoI hate them for that. It's winter time now, so I have my car heater blower on all the time. Whenever I start smelling diesel in my car, a TDI engine is in front of me.
- kaybe 3y agoPlease get an active carbon filter for your air inlet. They’re not expensive and most cars only have the pollen filter version. We found very high pollution values inside cars which in hindsight is very much not surprising due to what you noticed. A carbon filter brings it way down.
- Glawen 3y agocan try again, but I did not notice a real difference previously.
- iancmceachern 3y agoWe found that this (powered car air filter) is great: https://www.iqair.com/us/air-purifiers/atem-car https://www.iqair.com/us/air-purifiers/atem-car
- kreetx 3y agoI wonder if that was already a symptom of declining company culture?
- superduty 3y agoShedding the outdated burdens of unions and the dealership sales model is all that will save these dinosaurs and allow them to innovate at competitive prices. Dump unions, automate far more, implement cutting edge materials and processes and technologies, dump the dealer mafia, and all will be well.
- windwindow 3y agoseems awfully anti-employee to me
- iancmceachern 3y agoSo all that money can go to a billionaire or executives instead? Those people, the ones running the dealerships and the ones with the union jobs. They're the ones buying the cars. I think the key here were big management blunders like Dieselgate etc. Other car companies that use these same models are doing fine.
- 3seashells 3y agoReality is a nightmare wherever that recipe was followed through, yet the solution is to demand more of the same monopoly mess. Ideology and insanity, the same Algo, different results, yadada Yada ya..
- martin8412 3y agoNot happening
- DarkNova6 3y agoVW clearly has an ineffective and corrupt leadership which has way too much influence in German politics. And your solution is to... make the leadership less accountable? Yeah, I call BS.
- TheLoafOfBread 3y agoOh no, damn union protecting people from being exploited by their employer. What a backward thing to do...
- tibbydudeza 3y agoThey used to make affordable cars like their nameplate implied (People's Cars) but these days you have to go Japanese, Korean, Chinese of heaven forbid French if you want anything affordable. There is no city cars in their lineup - the Polo is now looks like and priced like a Golf from a few years back and the Up got canned.
- martin8412 3y agoID2 is coming in 2025 at 25k.. At least according to their own announcement.
- tibbydudeza 3y agoToo late to save the proverbial bacon - the 20K Euro ID.1 is even further off - 2027.
- tonyedgecombe 3y agoI remember when the ID.3 was announced it was promised at that price point.
- bencelaszlo 3y agoThat is actually because of BYD and other Chinese competition offer far lower prices and they started to lose ground even in Europe.
- dagurp 3y agoThe e-up!?
- tonyedgecombe 3y agoDead.
- tonyedgecombe 3y ago>There is no city cars in their lineup This is a problem across most manufacturers. Ford recently canned the Fiesta, the best selling car in the UK.
- IronWolve 3y agoBeen looking at under 30k entry level crossovers/suvs and the reliability reviews I see are pretty bad. Volkswagen Taos was given a 37 by consumer reports, their entry level crossover/suv seems to be ranked pretty low. But they have great reviews for 2024 Taos and its under 30k, buts its new, so who really knows. So much new tech in 2024-2026 coming out, models are changing pretty heavily during refresh. I think word of mouth is to avoid them.
- neoncontrails 3y agoI was in the market a couple months ago (US). If you haven't given the 2023 Id.4 a look, you might consider it. They're practically giving them away right now due to surplus inventory. The lease deals are especially attractive. My monthly is about what I was quoted for a Honda Accord or a Prius. Software is atrocious. Everything else, extremely happy. While everyone else queues up in an endless Costco line to save $10 off their $100 gas bill, I just relax and order sushi while my car chugs free Level 1 electricity outside.
- tonyedgecombe 3y agoVW employees far too many staff. 643,000 vs 366,000 for Toyota (who have a larger market share). https://www.statista.com/statistics/1186629/workforce-major-car-companies/ https://www.statista.com/statistics/1186629/workforce-major-... https://www.statista.com/statistics/316786/global-market-share-of-the-leading-automakers/ https://www.statista.com/statistics/316786/global-market-sha...
- tibbydudeza 3y agoIs this for the entire group (VWAG) - there are several brands like Audi, Porsche, SEAT and Skoda with their own factories/staff.
- tonyedgecombe 3y agoYes for both stats.
- tibbydudeza 3y agoThanks - that is certainly not a good number i.r.o sales.
- Tanoc 3y agoNuking effectively everything except the Touareg, Tiguan, Atlas, Taos, Q7, Q8, and the entire Porsche lineup in the US has done them no favours. The Golf is dead, New Beetle is dead, Passat is dead, the A5 is being neglected, the A8 is just the previous generation with new styling in and out, the A3 still hasn't made it over here in enough numbers for dealers to actually sell them, the A4 is being neglected and hasn't gotten the Q7's upgrades, the Jetta's due to die, Arteon's due to die, and for a partner to the ID.4 the ID.2 hasn't even been launched in favour of slinging us the insultingly priced ID.buzz instead which dealers won't even take allocations for because they know a $60,000 (starting price, most trims hit $80,000) minivan that can't be used as a minivan won't sell. All of the discontinued models were slated to be sent behind the barn before the pandemic, so they can't even use that as an excuse. They tried to copy Ford's stupid move of dropping all sedans and hatchbacks save for the performance halo car and focusing on SUV and CUV sales, and they're seeing the same result of losing market share and being forced upmarket to cover the loss, squeezing margins. Plus the financing plans where they're seemingly deciding to do almost the exact same thing Mitsubishi did in 2001 in offering 0% interest rates and no down payment to grab the Atlas and Taos because they want to eat into the market share that the Nissan Rogue and Kia Sorento have. Carlos Ghosn's stupidity in chasing volume via financing anyone who could breathe at shockingly low interest rates nearly destroyed Nissan and was the reason why he got ousted from both Renault and Nissan. Meanwhile the other manufacturers are seeing the dour consequences of abandoning the $30,000 and below segment and chasing the high end $70,000+ full size SUV customers, which is a tiny fraction of a market that's shrinking further because the upmarket push creates a feedback loop. Volkswagen does not have the cheapness of Nissan and Kia to make up volume, and they don't have the perceived robustness of Toyota to build a base to move upmarket. They're stuck, and they're slinging Taos' and low financing out like candy hoping it will save them and bring back former Golf customers.
- simonblack 3y agoJust part of the de-industrialisation of Germany, since the loss of cheap energy and materials. The whole of Europe is headed the same way.
- fransje26 3y agoWell, maybe their substandard reliability has something to do with it.. https://www.consumerreports.org/cars/car-reliability-owner-satisfaction/who-makes-the-most-reliable-cars-a7824554938/ https://www.consumerreports.org/cars/car-reliability-owner-s...