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> 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

> 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 ago
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 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 ago
  I 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 ago
    I 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 ago
      Then Chinese stuff will get hit by tariffs, as it was the case with Chinese steel.
      - starbugs 3y ago
        Germany 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.
  - fxtentacle 3y ago
    Politics was, luckily for VW, very successful at massively delaying Vinfast's market entry with regulations. Otherwise, that electrical 5-seat SUV for only €17600 would have been a massive problem for German car companies. It's like 70% cheaper than an ID.4 and people will probably accept a lot of small hiccups for that amount of money saved.
    - starbugs 3y ago
      The state and VW are quite intertwined, so I guess our politicians will not stop before they have driven this whole thing into the ground completely. Ultimately, I believe this will be a good thing for Germany in the long run. But for quite some while, this will cause substantial pain to a lot of German citizens.
- mgoetzke 3y ago
  I would hope that the largest car company in Europe still outsells others in their home countries. They are pushing everything they have into Europe where they still have the largest lead in Mindspace, Dealerships, Relations with Leasing partners etc. They also offer some cars at very extreme monthly payments and still they reduce production. Tesla will make a lower cost model soon and a Model 3 will likely also come from Brandenburg soon, so right now VW competition is not even fully there yet. Question is whether they can sustain that.
  - einr 3y ago
    I would hope that the largest car company in Europe still outsells others in their home countries. They are pushing everything they have into Europe where they still have the largest lead in Mindspace, Dealerships, Relations with Leasing partners etc. This is not really surprising or bad strategy. VW has zero chance in China and America is a very underdeveloped market so focusing on Europe makes all the sense in the world. The question was whether they have competitive products right now and I find it really strange to say they don't when they have the #4 and #5 best selling EVs in all of Europe (not just Germany): https://www.statista.com/statistics/972845/electric-vehicles-leading-models-europe/ https://www.statista.com/statistics/972845/electric-vehicles... There are more very successful VAG products in there too, like the Audi eTron and the Skoda Enyaq. They might be unable to sustain this -- I don't know -- but right now, as a Swedish dude in Sweden, VW is very much looking like one of the winners judging by what cars I see on the road. Also: any statement to the effect of "Tesla will release a new product soon" I will take with a mountain of salt, considering their track record.
    - starbugs 3y ago
      > The question was whether they have competitive products right now and I find it really strange to say they don't when they have the #4 and #5 best selling EVs in all of Europe (not just Germany) You can have high sales numbers and still not be competitive if you don't turn those sales into viable profits. I think it's also important to distinguish between the VW brand and company. The article explicitly says: > “With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand,” Thomas Schaefer told staff during a meeting at the German carmaker’s headquarters in Wolfsburg, Germany, according to a post on the company’s intranet site seen by Reuters.’ So there can be no doubt that the VW brand is in trouble with regards to competitiveness. The company may still be doing "fine" due to high end brands still performing well.
fransje26 3y ago
> 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. Who would have thought that pilling up incompetent energy policies one after an other would come back to bite them.. And if only the energy policies where the only bad choices they were making..
fxtentacle 3y ago
I believe VW is failing like this: https://www.youtube.com/watch?v=rpkoCZ4vBSI https://www.youtube.com/watch?v=rpkoCZ4vBSI (talk Disruptive innovation by Clayton Christensen). VW used to be the cheap option for the masses, hence the name "Volkswagen" = "people car". They could then successfully push out competitors by gradually raising quality and prices. But by now, VW is one of the most premium brands in Germany. So their usual "raise quality and prices" strategy has stopped working. My parents' generation loved their VW Golf, which back then was a cheap car for students. But nowadays, a new VW Gold can cost €44000 which is completely out of reach for most students and young adults. Similarly, they used to have ads mocking the fact that a VW Transporter was an extremely popular family car used for vacations and camping trips. At €90000 for a Volkswagen Transporter (version 7), it's now become more of a status symbol or collector's item. Actual families will buy a €8000 Dacia transporter. And in line with Christensen's talk, it looks like Dacia is now scaling up quality and raising prices, thereby pushing VW out of the budget market into the much smaller premium segment.

einr 3y ago

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 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 ago
I 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 ago
  I 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 ago
    Then Chinese stuff will get hit by tariffs, as it was the case with Chinese steel.
    - starbugs 3y ago
      Germany 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.
- fxtentacle 3y ago
  Politics was, luckily for VW, very successful at massively delaying Vinfast's market entry with regulations. Otherwise, that electrical 5-seat SUV for only €17600 would have been a massive problem for German car companies. It's like 70% cheaper than an ID.4 and people will probably accept a lot of small hiccups for that amount of money saved.
  - starbugs 3y ago
    The state and VW are quite intertwined, so I guess our politicians will not stop before they have driven this whole thing into the ground completely. Ultimately, I believe this will be a good thing for Germany in the long run. But for quite some while, this will cause substantial pain to a lot of German citizens.
mgoetzke 3y ago
I would hope that the largest car company in Europe still outsells others in their home countries. They are pushing everything they have into Europe where they still have the largest lead in Mindspace, Dealerships, Relations with Leasing partners etc. They also offer some cars at very extreme monthly payments and still they reduce production. Tesla will make a lower cost model soon and a Model 3 will likely also come from Brandenburg soon, so right now VW competition is not even fully there yet. Question is whether they can sustain that.
- einr 3y ago
  I would hope that the largest car company in Europe still outsells others in their home countries. They are pushing everything they have into Europe where they still have the largest lead in Mindspace, Dealerships, Relations with Leasing partners etc. This is not really surprising or bad strategy. VW has zero chance in China and America is a very underdeveloped market so focusing on Europe makes all the sense in the world. The question was whether they have competitive products right now and I find it really strange to say they don't when they have the #4 and #5 best selling EVs in all of Europe (not just Germany): https://www.statista.com/statistics/972845/electric-vehicles-leading-models-europe/ https://www.statista.com/statistics/972845/electric-vehicles... There are more very successful VAG products in there too, like the Audi eTron and the Skoda Enyaq. They might be unable to sustain this -- I don't know -- but right now, as a Swedish dude in Sweden, VW is very much looking like one of the winners judging by what cars I see on the road. Also: any statement to the effect of "Tesla will release a new product soon" I will take with a mountain of salt, considering their track record.
  - starbugs 3y ago
    > The question was whether they have competitive products right now and I find it really strange to say they don't when they have the #4 and #5 best selling EVs in all of Europe (not just Germany) You can have high sales numbers and still not be competitive if you don't turn those sales into viable profits. I think it's also important to distinguish between the VW brand and company. The article explicitly says: > “With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand,” Thomas Schaefer told staff during a meeting at the German carmaker’s headquarters in Wolfsburg, Germany, according to a post on the company’s intranet site seen by Reuters.’ So there can be no doubt that the VW brand is in trouble with regards to competitiveness. The company may still be doing "fine" due to high end brands still performing well.

fransje26 3y ago

> 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. Who would have thought that pilling up incompetent energy policies one after an other would come back to bite them.. And if only the energy policies where the only bad choices they were making..

fxtentacle 3y ago

I believe VW is failing like this: https://www.youtube.com/watch?v=rpkoCZ4vBSI https://www.youtube.com/watch?v=rpkoCZ4vBSI (talk Disruptive innovation by Clayton Christensen). VW used to be the cheap option for the masses, hence the name "Volkswagen" = "people car". They could then successfully push out competitors by gradually raising quality and prices. But by now, VW is one of the most premium brands in Germany. So their usual "raise quality and prices" strategy has stopped working. My parents' generation loved their VW Golf, which back then was a cheap car for students. But nowadays, a new VW Gold can cost €44000 which is completely out of reach for most students and young adults. Similarly, they used to have ads mocking the fact that a VW Transporter was an extremely popular family car used for vacations and camping trips. At €90000 for a Volkswagen Transporter (version 7), it's now become more of a status symbol or collector's item. Actual families will buy a €8000 Dacia transporter. And in line with Christensen's talk, it looks like Dacia is now scaling up quality and raising prices, thereby pushing VW out of the budget market into the much smaller premium segment.