Volkswagen: Sales, Marketing, and Financial News
10-31-2003, 07:43 AM
#1
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Volkswagen: Sales, Marketing, and Financial News
2004 Volkswagen Phaeton
Will it Fly? If America accepts the idea of a luxury Volkswagen, the Phaeton can take off
By MARK VAUGHN
THE NAME PHAETON has two meanings.
The first is from Greek mythology. Phaeton was the son of Helios, the sun god. Every day Helios would drive the family chariot across the sky, wearing the rays of the sun as a crown, lighting the day. His job was pretty important and had to be handled delicately. One day Phaeton convinced his father to loan him the chariot, which, with a golden axle, silver spokes and diamonds in place of chrome trim, was one stylin’ ride.
Sadly, as is often the case with teenagers behind the wheel, Phaeton drove the chariot of the sun god so close to the earth that he boiled the oceans, scorched the land, etc., and Zeus had to kill him with a lightning bolt.
The second meaning of Phaeton refers to an elegant carriage of the 17th century, which the owner drove himself.
The question for Volkswagen is whether its Phaeton will be seen as an elegant coach driven by its owner, or as a nice-enough luxury car saddled with insurmountable image problems that demand it be killed with a lightning bolt.
Perception may be the biggest hurdle facing VW as it reaches for the stars (or the sun, more appropriately). Can this historically entry-level manufacturer make it as a builder of luxury cars? Will the Phaeton, no matter how good it is, ever be given the respect it deserves?
We just spent a few days driving Phaetons across Germany, going as fast as the luxo-cruiser would go, and it deserves plenty of respect. The cars were all U.S.-spec long-wheelbase models, since we won’t be getting the short-wheelbase model sold in Europe here. Nor will we get the V6. We might get the V10 turbodiesel if the California Air Resources Board exempts diesels from its high-speed NOx emissions regulations—maybe they will, maybe they won’t. Write them a letter, will you?
On the off chance CARB does do something, we started our drives in the turbodiesel. VW board member Wilfried Bockelmann said it’s the most powerful passenger-car 10-cylinder engine in the world. With twin-turbos and direct injection it makes 313 hp and 553 lb-ft. What does that mean? For starters, it means Dodge Viper owners will launch a letter-writing campaign pointing out the Viper V10 makes 500 hp, which is more than 313 you (fill in the derisive blank, extra points if you use “college boy” and “anti-American” in the same sentence). Still, the VW has an edge over even Viper on torque.
How was the V10 turbo-diesel to drive? It took about half a second to find out. Even a mighty V10 isn’t immune to turbo lag. Stomping on the gas, trying to access a hole in Frankfurt traffic, we found a half-second was how long it took for the power to come on. Not Viper-like. After that, when we finally got on the autobahn, it was much better. Not like a Mercedes-Benz twin-turbo V12 or even the Audi twin-turbo V8 RS6, both of which seem to offer more seat-squashing oomph, but we got to 155 mph on clear, dry stretches of autobahn with ease. There was none of the rattle and clank you might remember from the old passenger-car diesels.
So the Touareg SUV will get the V10 diesel first, by the end of this year in the United States. A diesel truck is supposedly easier for Americans to absorb. VW won’t bring the diesel in with the first batch of Phaetons, and even if it does so later, it forecasts a mere 5 percent take-rate on a diesel Phaeton.
We drove from Frankfurt to Dresden on diesel, then we were cooking on gas in V8 and W12 Phaetons for the run to Berlin. VW chose the V8 over the Passat’s W8 because it has more torque. It is the same five-valve, 4.2-liter engine used in the Audi A8 L, but in a different body. While Audi goes for sportiness in a lightweight aluminum body, the VW uses aluminum only in the doors, hood and trunk; the rest is steel.
“Audi is for the sporty driver, for instance a BMW driver,” said Bockelmann. “Our target is more the Mercedes-Benz driver, who is looking for comfort and very good style, but the No. 1 goal is not sporty.”
The V8 gets to 60 mph in a respectable 6.7 seconds. That could be quicker with a manual, but only a six-speed automatic with Tiptronic shifter is available. Front suspension is four-link, with trapezoidal wishbones rear. There is a self-leveling air suspension at all corners with four settings for firmness, plus height adjustment from 4.4 inches to 6.0 inches of ground clearance. Above 86 mph the suspension automatically drops; at lower speeds it raises to pamper driver and passengers.
“Only flying is better,” said Bockelmann.
This time he was right.
We sailed over the autobahn at speeds limited only by the 235/55R-17 tires, which meant the engine management system had been programmed to cut out at 130 mph.
The 6.0-liter W12 offers the most return on engineering. A W12 is two VR6s stuck together in a V, which actually makes it a double V instead of a W, but that’s not important. What is important is that it makes 420 hp and 400 lb-ft. It pulled well from 3000 rpm, but really came on the cams at 4000 and above. VW promises 0 to 60 mph in 5.9 seconds, via the five-speed Tiptronic automatic transmission. Again, top speed is limited by tires to 130 mph on U.S. models. It is a good, strong engine, but you have to wonder if all that complexity is worth the packaging benefits of the W configuration, especially considering the lackluster reaction to the W8 Passat in the States.
Like the W8 Passat, both V8 and W12 Phaetons come with 4Motion permanent awd with Torsen center differential.
From the outside, the Phaeton really maintains a stealth approach. Admirers will say it has a stately presence unlike anything else in the class. Cynics will say it looks like a stretched Passat. You decide. The trunk lid has about the biggest VW logo since the Type II van. Or the Touareg grille. Anyone looking for low-key will want to shave that off.
Inside, the Phaeton has room to relax, five inches more leg-room than in the smaller model available in Europe. Overall length is 204 inches. The wheelbase is 118 inches, and it seems most of it goes to the rear seats. Interior volume is a healthy 108 cubic feet. VW also has learned from the maddening BMW iDrive and Mercedes console mistakes, and has added buttons to the periphery of the main console screen for easier navigation of the car’s electronic systems.
It will be more difficult for VW to navigate the American market. Only 200 dealers, those that have “the market potential to sell it, among other things,” will offer the Phaeton, according to a VW official.
Quality is another hurdle for VW, which has suffered a number of well-documented problems in this area lately. VW officials say the Dresden Phaeton factory has been cranking out high-quality Phaetons for the European market for a year, and that it’s ready for the U.S. cars.
Maybe the most critical thing for the success of the Phaeton is pricing. VW won’t say until one month before the December launch where it will price the car. In Europe the V8 sells for 73,000 euros, or $84,880. The W12 is 100,000 euros, or $116,274. A VW executive hinted the V8 Phaeton would be closer in price to the Mercedes S430, which stickers at $73,320. In any case, VW might do well to follow Lexus’ lead and lose some money in the first year or two to draw a crowd in the showroom.
Not that the intended buyers follow crowds. Frank Maguire, vp of sales and marketing for VW of America, said VW will sell this car to “writers, inventors, risk-takers, people who walk down their own, non-beaten path.”
Maguire calls these people “transcendent drivers, they’re proud to be different... people who wanted luxury but didn’t want to be saddled with a luxury badge, people not looking for status, not worrying about what their neighbors are driving.”
Yes, we’ve seen people like that driving VWs, but they’re driving old Westphalia camper vans. Surely that’s not the Phaeton customer? No, Phaeton customers will have an average pretax annual household income of $300,000, which means they’re not driving Sciroccos. At least not anymore. Each year 15 percent of VW customers graduate to luxury sedans. So the Phaeton is VW’s attempt to keep those upscale customers in the fold.
The Phaeton is an excellent luxury car that comes with absolutely no brand cachet. It’s a big gamble, forged in the big ego and scorched-earth competitive fervor of former VW chairman Ferdinand Piech. If it succeeds, VW will stand toe-to-toe with Mercedes, just as Piech asserted. If the gamble fails, it may share the same epitaph written on the tombstone of Phaeton, the son of Helios: “He could not rule his father’s car of fire, “Yet was it much so nobly to aspire.”
2004 VOLKSWAGEN PHAETON
ON SALE: December
BASE PRICE: $60,000 (est.)
POWERTRAIN: 4.2-liter, 338-hp, 317-lb-ft V8; awd, six-speed automatic
CURB WEIGHT: 5194 pound
0-60 MPH: 6.7 seconds (mfr.)
10-31-2003, 07:56 AM
#2
Yeehaw
"Our target is more the Mercedes-Benz driver"
good luck getting them to trade in the Benz for a VW...
they are basing this whole car on the premise that there are enough people out there who have $75,000 to spend on a car, but don't care about image or branding...I don't know too many people like that.
nice car though. I like that automatic suspension that lowers at 85mph or whatever it was...
good luck getting them to trade in the Benz for a VW...
they are basing this whole car on the premise that there are enough people out there who have $75,000 to spend on a car, but don't care about image or branding...I don't know too many people like that.
nice car though. I like that automatic suspension that lowers at 85mph or whatever it was...
10-31-2003, 08:00 AM
#3
Banned
Join Date: Dec 2001
Location: Milwaukee, WI
Age: 44
Posts: 6,227
Likes: 0
Received 0 Likes
on
0 Posts
this is a foolish move by VW....they have their own fucking luxury brand already....hello....audi. no Benz driver wants to DOWNGRADE to a fuckin VW...and thats what it is....a DOWNGRADE
10-31-2003, 08:02 AM
#5
Instructor
Join Date: Aug 2002
Location: Port Chester, NY
Age: 43
Posts: 208
Likes: 0
Received 0 Likes
on
0 Posts
It costs $84K in Europe? If that's what it'll cost here then no one is gonna buy that thing. If people are gonna shell out that kind of money, they're gonna shell it out for a Benz or BMW. VW doesn't have that kind of prestige.
10-31-2003, 08:03 AM
#6
The Creator
Originally posted by jimcol711
this is a foolish move by VW....they have their own fucking luxury brand already....hello....audi. no Benz driver wants to DOWNGRADE to a fuckin VW...and thats what it is....a DOWNGRADE
this is a foolish move by VW....they have their own fucking luxury brand already....hello....audi. no Benz driver wants to DOWNGRADE to a fuckin VW...and thats what it is....a DOWNGRADE
anyone with any real class or a goddamn clue would see and accept the phaeton for what it is. an exquisite piece of machinery.
Trending Topics
10-31-2003, 08:31 AM
#9
The Creator
this is probably the most WELL BUILT car on the market.
you guys should do some research on the reason and ways VW produced this vehicle before you badmouth it
you guys should do some research on the reason and ways VW produced this vehicle before you badmouth it
10-31-2003, 08:49 AM
#12
Full-Time IDIoT---DoH!!!
Join Date: Jan 2002
Location: DUMB ISLAND
Age: 41
Posts: 4,654
Likes: 0
Received 16 Likes
on
10 Posts
this car will be a great used car once the depreciation sets in IMO
its an wesome car, but why not buy an A8
plus arent this and the a8 made at the same plant?
its an wesome car, but why not buy an A8
plus arent this and the a8 made at the same plant?
10-31-2003, 08:54 AM
#14
Suzuka Master
Join Date: Jun 2001
Location: Los Angeles, CA
Age: 45
Posts: 7,083
Likes: 0
Received 0 Likes
on
0 Posts
I think it's an excellent car, but a horrible business decision by the former CEO of VW. I can almost guarantee this will be a case study for MBA classes in the not too distant future.
To me, it's like McDonalds trying to serving 5 star cuisines or Walmart coming out with a line of clothes on par with Gucci, Prada, etc.. I know these examples are extreme, but I think my point comes across.
As much as many people say they don't buy a car for the name, spending that much $$ for an automobile, people usually want more than just a good car. They want world class service - who wants to pay this much $$ for a car and wait in line with Golf's and Jetta's? They want the name. We all do in some way or another.
It's like Chevrolet creating a world class sedan. Why not let Cadillac release it? Same thing with VW and Audi.
To me, it's like McDonalds trying to serving 5 star cuisines or Walmart coming out with a line of clothes on par with Gucci, Prada, etc.. I know these examples are extreme, but I think my point comes across.
As much as many people say they don't buy a car for the name, spending that much $$ for an automobile, people usually want more than just a good car. They want world class service - who wants to pay this much $$ for a car and wait in line with Golf's and Jetta's? They want the name. We all do in some way or another.
It's like Chevrolet creating a world class sedan. Why not let Cadillac release it? Same thing with VW and Audi.
10-31-2003, 09:00 AM
#15
Suzuka Master
Join Date: Jun 2001
Location: Los Angeles, CA
Age: 45
Posts: 7,083
Likes: 0
Received 0 Likes
on
0 Posts
Another way to explain my point. Who really truly needs a car that costs that much? Cars, no matter what shape or size all provide transportation. A civic can do it for much cheaper and more efficiently.
Why do people buy designer clothes? It provides the same basic purpose as a pair of clothes from the Gap.
Why??? Because it's more than just basic needs. It's about an image. To pay that much $$ for something like that, you want more than just the car or clothes. You want the name. You want the image that that product provides. Classic marketing 101.
Not everyone will admit it, but it's true. And it's just not America. It's clearly happening in Europe too. They may think we're more shallow, but they just won't admit it
Why do people buy designer clothes? It provides the same basic purpose as a pair of clothes from the Gap.
Why??? Because it's more than just basic needs. It's about an image. To pay that much $$ for something like that, you want more than just the car or clothes. You want the name. You want the image that that product provides. Classic marketing 101.
Not everyone will admit it, but it's true. And it's just not America. It's clearly happening in Europe too. They may think we're more shallow, but they just won't admit it
10-31-2003, 09:20 AM
#16
Advanced
Join Date: Sep 2003
Location: Red Bank, NJ
Posts: 62
Likes: 0
Received 0 Likes
on
0 Posts
I don't know why you guys think VW's are so cheap and economical. I love mine, it's fine quality and such a comfortable car, heated leather seats, and the great interior is all the luxery I need.
10-31-2003, 09:40 AM
#17
Suzuka Master
Join Date: Jun 2001
Location: Los Angeles, CA
Age: 45
Posts: 7,083
Likes: 0
Received 0 Likes
on
0 Posts
This is straight from Bob Lutz's mouth... Seems to be in line with what I was saying:
"And though he's recently retired, Ferdinand Piech of Volkswagen-Audi is perhaps a somewhat flawed personality because of his enthusiasm and intellectual brilliance and his passion for high-performance machines. I think this caused him to lose balance a little bit, and it's a balance that I've always struggled to maintain within myself, because you've got to take care of the bread-and-butter stuff. Perhaps what Piech did was he neglected the bread-and-butter Volkswagens and let them get a little bit old as he was doing Lamborghini Murcielagos and Lamborghini Gallardos and Bugatti Veryons, Bentley W8s, Volkswagen Phaetons and multicylinder, 12-cylinder, 16-cylinder luxury cars — until the cows come home. This was pursuing his own personal passion and doing these exciting, exceptional cars, which get the attention of the car magazines and car enthusiasts like me, but they don't really move the day-to-day iron. But he's still, if somewhat flawed, an amazing guy with incredible intuition for what works and what doesn't"
"And though he's recently retired, Ferdinand Piech of Volkswagen-Audi is perhaps a somewhat flawed personality because of his enthusiasm and intellectual brilliance and his passion for high-performance machines. I think this caused him to lose balance a little bit, and it's a balance that I've always struggled to maintain within myself, because you've got to take care of the bread-and-butter stuff. Perhaps what Piech did was he neglected the bread-and-butter Volkswagens and let them get a little bit old as he was doing Lamborghini Murcielagos and Lamborghini Gallardos and Bugatti Veryons, Bentley W8s, Volkswagen Phaetons and multicylinder, 12-cylinder, 16-cylinder luxury cars — until the cows come home. This was pursuing his own personal passion and doing these exciting, exceptional cars, which get the attention of the car magazines and car enthusiasts like me, but they don't really move the day-to-day iron. But he's still, if somewhat flawed, an amazing guy with incredible intuition for what works and what doesn't"
10-31-2003, 09:41 AM
#18
Suzuka Master
Join Date: Jun 2001
Location: Los Angeles, CA
Age: 45
Posts: 7,083
Likes: 0
Received 0 Likes
on
0 Posts
I don't know why you guys think VW's are so cheap and economical. I love mine, it's fine quality and such a comfortable car, heated leather seats, and the great interior is all the luxery I need.
10-31-2003, 10:17 AM
#19
Safety Car
Join Date: Sep 2002
Location: philly
Posts: 4,426
Likes: 0
Received 0 Likes
on
0 Posts
maybe not the same 'perceived' class. the interior alone in these new luxury vw's are some of the best i've seen in any luxury car. it will take time but i think its possible for them to sell these cars as long as the reliability stays high.
10-31-2003, 10:28 AM
#20
Banned
Join Date: Dec 2001
Location: Milwaukee, WI
Age: 44
Posts: 6,227
Likes: 0
Received 0 Likes
on
0 Posts
Originally posted by soopa
anyone with any real class or a goddamn clue would see and accept the phaeton for what it is. an exquisite piece of machinery.
anyone with any real class or a goddamn clue would see and accept the phaeton for what it is. an exquisite piece of machinery.
i didnt mean to imply that the car is a peice of shit, i know its not, it is a great car. BUT its horribly mis-cast in the VW lineup. VW needs to keep its lines sharp and obvious between Audi and VW. bluring those lines will lead to lost sales for both audi AND VW. the car should simply be an audi. period.
10-31-2003, 10:30 AM
#21
Banned
Join Date: Dec 2001
Location: Milwaukee, WI
Age: 44
Posts: 6,227
Likes: 0
Received 0 Likes
on
0 Posts
the other problem VW has is their fucking stupid naming now.. whats with creating names that look and sound stupid and most people pronounce differently. thats just bad business. im all for originallity in naming of vehicles but to make up stupid words or use words from languages that no one is familiar with cant be good for business, it just makes people lose intrest because of their confusion
10-31-2003, 10:35 AM
#22
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by soopa
oollllld article.
oollllld article.
10-31-2003, 10:40 AM
#23
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by soopa
anyone with any real class or a goddamn clue would see and accept the phaeton for what it is. an exquisite piece of machinery.
anyone with any real class or a goddamn clue would see and accept the phaeton for what it is. an exquisite piece of machinery.
That's all people know cos the above brands took decades to feed that notion to the public. Plus that's all they market here in the USA. Luxury cars. No Golfs, Beetles, etc. That's why Honda sells their luxury under the Acura name, same for Toyota and Nissa with Lexus and Infiniti. I am not saying anything new to you, I am aware.
You just cannot start selling a $70K car under the VW name which up to a few months ago had the V6 Passat as its Prestige Vehicle and expect any type of sales success. You cant.
It's a challenge as it is for VW to convince people to sell $30K+ vehicles, let a lone a W8 Passat. That was a failure here and there. So why they are going all out with this S Class beater, I have no idea.
To improve the name of the brand, YES. Absolutely the Phaeton can achieve that, like the GT will do to Ford, e.g. But to expect to make money off of it, no way. Aint happening for at least the first 10 years.
10-31-2003, 10:43 AM
#24
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by phipark
I thought Audi was supposed to cover the top-end luxury.
I thought Audi was supposed to cover the top-end luxury.
And that's where the confusion comes. VW is TRYING to mislead the market, like Execs at Acura have admited Acura has done.
http://www.acura-cl.com/forums/showt...hreadid=117348
10-31-2003, 10:43 AM
#25
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by cusdaddy
I think it's an excellent car, but a horrible business decision by the former CEO of VW. I can almost guarantee this will be a case study for MBA classes in the not too distant future.
I think it's an excellent car, but a horrible business decision by the former CEO of VW. I can almost guarantee this will be a case study for MBA classes in the not too distant future.
10-31-2003, 10:47 AM
#26
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by Exit109GTI
I don't know why you guys think VW's are so cheap and economical. I love mine, it's fine quality and such a comfortable car, heated leather seats, and the great interior is all the luxery I need.
I don't know why you guys think VW's are so cheap and economical. I love mine, it's fine quality and such a comfortable car, heated leather seats, and the great interior is all the luxery I need.
You want luxury? VW's got Audi for it. You want rediculous luxury, they now have Bentley. You want economy sport, they got SEAT in Europe. You want luxury sport, Audi can cover that one too. You want super sport, Lambo is ready to go. You want rediculous sport and luxury, you got Bugatti. They are totally covered. Why start overlapping now?
10-31-2003, 10:50 AM
#27
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by cusdaddy
This is straight from Bob Lutz's mouth... Seems to be in line with what I was saying:
"And though he's recently retired, Ferdinand Piech of Volkswagen-Audi is perhaps a somewhat flawed personality because of his enthusiasm and intellectual brilliance and his passion for high-performance machines. I think this caused him to lose balance a little bit, and it's a balance that I've always struggled to maintain within myself, because you've got to take care of the bread-and-butter stuff. Perhaps what Piech did was he neglected the bread-and-butter Volkswagens and let them get a little bit old as he was doing Lamborghini Murcielagos and Lamborghini Gallardos and Bugatti Veryons, Bentley W8s, Volkswagen Phaetons and multicylinder, 12-cylinder, 16-cylinder luxury cars — until the cows come home. This was pursuing his own personal passion and doing these exciting, exceptional cars, which get the attention of the car magazines and car enthusiasts like me, but they don't really move the day-to-day iron. But he's still, if somewhat flawed, an amazing guy with incredible intuition for what works and what doesn't"
This is straight from Bob Lutz's mouth... Seems to be in line with what I was saying:
"And though he's recently retired, Ferdinand Piech of Volkswagen-Audi is perhaps a somewhat flawed personality because of his enthusiasm and intellectual brilliance and his passion for high-performance machines. I think this caused him to lose balance a little bit, and it's a balance that I've always struggled to maintain within myself, because you've got to take care of the bread-and-butter stuff. Perhaps what Piech did was he neglected the bread-and-butter Volkswagens and let them get a little bit old as he was doing Lamborghini Murcielagos and Lamborghini Gallardos and Bugatti Veryons, Bentley W8s, Volkswagen Phaetons and multicylinder, 12-cylinder, 16-cylinder luxury cars — until the cows come home. This was pursuing his own personal passion and doing these exciting, exceptional cars, which get the attention of the car magazines and car enthusiasts like me, but they don't really move the day-to-day iron. But he's still, if somewhat flawed, an amazing guy with incredible intuition for what works and what doesn't"
10-31-2003, 10:53 AM
#28
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Here is the article from Fortune (only subscribers have access to the complete article so please read it):
------------------------------------------------------------------------------------
VOLKSWAGEN
Getting the Bugs Out at Volkswagen
Declining share, falling profits, too many brands—can VW's new boss get the company back on track?
FORTUNE
Monday, September 29, 2003
By Janet Guyon
The night before the Frankfurt auto show last month, Volkswagen CEO Bernd Pischetsrieder seemed anxious. Two weeks earlier, VW had unveiled its latest redesign of the Golf, the company's biggest-selling car, and the next day it would be on display for hordes of international auto writers. Good Golf reviews are essential to VW's future financial health. Asked how he was doing, Pischetsrieder replied, "I'd prefer to answer that question after the show is over."
How well the new Golf sells remains to be seen, but Pischetsrieder has good reason to be nervous. The world's fifth-largest car company is losing market share to Japanese and other European manufacturers, its profits are deteriorating, and it's suffering from a multiplicity of brands and models, including several at the high-end of the car chain, where the "people's automaker" has never gone before. And the new CEO has to fix all that with his predecessor looking over his shoulder.
On the job just 18 months, Pischetsrieder succeeded a legend, Ferdinand Piech, the Porsche scion who pulled VW out of a tailspin in the early 1990s. At VW's annual meeting in April 2002, Piech was honored with a standing ovation on his departure, but he made it clear that Pischetsrieder was his handpicked successor. Piech met Pischetsrieder when the latter ran BMW and the two fought over which company would get Rolls-Royce and its Bentley brand. VW took Bentley, BMW took Rolls, and Piech was taken with Pischetsrieder. "He was able to favorably guide negotiations and get that piece of the cake he wanted," Piech said before turning over the reins. "At the the end, I got both things I wanted. I got Bentley—and I got Pischetsrieder."
But while Piech reinvigorated VW with the new Beetle, quality improvements for its Seat and Skoda brands, and a system of platform engineering that helped it make more cars with fewer parts, he didn't meet his financial goal of a 6.5% return on sales. And he left Pischetsrieder with the legacy of his $1 billion rush toward luxury. Not only did Piech buy Bentley, he bought Bugatti and Lamborghini, and he built a $200 million glass-walled factory in Dresden that last year began making the $75,000 Phaeton, a luxury car that's supposed to put VW in the same league as BMW and Mercedes.
All that spending now is viewed as the self-indulgence of a man with gasoline in his veins. It diverted engineering talent from bread-and-butter models such as the Golf and Passat and from hot new product niches such as SUVs and multipurpose vehicles that VW is getting into only now. While Golf sales are declining, that model alone accounts for 15% of the five million cars and trucks that VW makes. Yet it wasn't until this fall that the company came out with a new version, seven years after the last one went into production. (The new Golf is longer, wider, and taller, but it doesn't look much different from the old one.) VW won't update the existing Passat, its second-biggest seller, until 2005.
To get VW back on track, Pischetsrieder must undo some of the legacy of the man who put him in the job—and who is still chairman. That's a tall order, because even though Piech voices his support publicly, he clearly expects Pischetsrieder to carry on where he left off.
So far Pischetsrieder is saying the right things. His first priority, he says over dinner in Frankfurt, is cost. He wants VW to achieve returns on investment greater than the cost of raising capital, something it failed to do last year. "We have so many fantastic plans, but we can't pursue them all if we continue to spend so much money," says Pischetsrieder. "I don't know if this is a vision, but I want the company to earn more money." Indeed, last year's results were a damper on the record results Piech achieved in 2001. Sales fell 1.8% to $82 billion, and operating profit fell 12% to $4.5 billion. Results this year will be worse, VW warns. "They've got a cost problem," says Stephen Reitman, an auto analyst at Merrill Lynch in London, who says he doesn't expect VW to meet its cost of capital until 2006.
VW also has a market-share problem. Last year it lost ground in its four biggest markets: Germany, China, the U.S., and Brazil. The American market has been particularly tricky. The new Beetle made a big splash when it arrived five years ago, but sales are tapering off. And the car market has been flooded with cheap financing. VW has refused to match the sales incentives of the American automakers. The resulting drop in volume has meant that VW's operating profit in North America fell to $65 million, from $769 million, in the first half of 2003. "I don't think it's the right thing to buy the market," Pischetsrieder says. "We'd rather keep our margins."
In Europe, where competition is brutal, VW has seen a drop in both market share and unit sales. It is being hammered by Japanese, French, and even American automakers. GM Opel's new Astra, for instance, has been favorably reviewed against the new Golf. In China, VW faces a different problem: Sales were up 43% last year, but market share was down. In order to regain its position, Pischetsrieder says, the company will have to invest $6 billion over the next four to five years.
The key to reviving VW, of course, is to make more cars that more buyers want to buy. To do that, Pischetsrieder has put some discipline into product planning, creating a central product-strategy committee that decides which brands attack which niches rather than allow VW, Skoda, Seat, and Audi to compete with one another. "I want every brand in its own segment and niche, and everywhere excellent design," he says. Executing a Piech idea never put into practice, Pischetsrieder has created two brand families within the company, the traditional VW family and the sporty Audi group.
He has also put new emphasis on design and marketing and pushed responsibility for creating a global image down to the individual brands. That, as well as making each brand responsible for its own sales, resulted in the high-profile departure last spring of Robert Buechelhoffer, a former BMW board member who was Piech's top marketing man and who, some say, didn't get along with Pischetsrieder. "It wasn't necessary to have one board member coordinate sales and marketing," says Pischetsrieder, who denies any personal friction. "It made it more difficult to give more responsibility to the brands."
Most car mavens believe Pischetsrieder, 55, is up to the job. An engineer by training, he calls himself a "petrol head" like Piech. Unlike his predecessor, he is more affable and approachable. And he cares about the financial markets. Analysts say VW has become more communicative, holding regular conference calls, and its financial statements are less opaque. Because VW is 18% owned by the state of Lower Saxony, which is more concerned with jobs than profits, Piech never took shareholder interests to heart. He just wanted to build great cars.
The one black mark on Pischetsrieder's resume—his ouster from BMW in 1999 for the failure of its 1994 Rover acquisition—doesn't seem to have hurt his reputation. Pischetsrieder spent 26 years at BMW, the last six as CEO, and his record there was otherwise impressive. BMW's initial strategy to diversify into mass-market cars looked better on paper than in reality, says John Lawson, auto analyst at Citigroup in London. After the purchase, the rise of the pound against the deutsche mark hurt Rover sales by making them more expensive relative to German luxury cars. "You could simply blame Pischetsrieder, but it would be a gross oversimplification," says Lawson. "BMW bought something they didn't understand." Of the Rover debacle, Pischetsrieder says, "I still think strategically it was the right choice."
One of BMW's problems with Rover was that the two brands didn't share a common culture or even similar parts. That's not true at VW. In fact, sharing common parts and technologies is a key element of both Piech's and Pischetsrieder's strategy to keep costs down. Parts of the Phaeton air-conditioning system are shared with the new Bentley Continental GT and the Audi A8. Pischetsrieder is also driving a common culture by moving managers around to run different brands. The former head of Audi now runs Bentley as well as global R&D, while the former head of Skoda sales and marketing is now in charge of VW brand marketing and distribution. Every top manager is being paid according to how well the entire group meets return-on-investment objectives.
Pischetsrieder says his strategy in branding and marketing, as well as production, is a "refinement and execution" of many of the ideas that Piech had. "I wouldn't have joined the company if I didn't agree with his strategy," he says. Indeed Piech first revealed the idea of forming two brand groups in a FORTUNE interview in 1999, when he sketched an X with Seat leading up to Audi, Bentley, and Lamborghini from the lower left to upper right and Skoda leading up to Volkswagen and Bugatti from the lower right to the upper left. Under Pischetsrieder, the Audi, or sporty, group consists of Seat, Audi, and Lamborghini, while the traditional VW family consists of Skoda, VW, Bentley, and Bugatti.
So far, there is little to show for the work of Pischetsrieder's product-strategy committee, which has been operating for about a year, mainly because it takes several years to develop new products in the car industry. "They're still dealing with a lot of decisions which were set in concrete some time back," says Reitman of Merrill Lynch. But executives say the committee has determined that certain brands will stay out of certain niches. Pischetsrieder is making all the final decisions. "If Audi wants to do a sports car in a specific price range," says Franz-Josef Paefgen, the Bentley CEO, "they take it to the committee, and Pischetsrieder may say 'No' because Bentley is doing it." In the past, if Audi could show that the new model would make money, Piech would have given it the green light.
Soon after he took over, Pischetsrieder said that Piech's approach created too many "hatchbacks, notchbacks, and long- backs," and too few SUVs, minivans, roadsters, and other profitable lifestyle niches that VW missed. "Rather than everyone chasing the hatchback market, some brands will chase certain segments," says Adrian Hallmark, director of sales and marketing at Bentley. For instance, Audi plans to use the platform of the new VW Touareg SUV, which has a six-month waiting list, to build an SUV of its own called Pikes Peak beginning in 2006. But Skoda and Seat will not be selling SUVs, at least not in that size, says Pischetsrieder. Meanwhile, to attack the roadster segment, VW and Audi each showed two-seaters at the Frankfurt auto show. Both may be built. "For Audi, Seat, and VW it would be fine to be in that segment," says Pischetsrieder—"just not in the same price, size, and performance category."
That all makes sense. What doesn't is VW's drive toward luxury, a strategy Piech believed would enable VW to get more pricing power. Bugatti has launched a $1 million, handbuilt Veyron sports car with a 1001 horsepower engine that can accelerate from zero to 62.1 miles per hour in just three seconds. Critics say the Veyron won't generate enough sales to make all that muscle worth the cost of developing it. But VW insists it will break even. "This is a product for car fanatics," says Pischetsrieder. "The next model will have to make money." Pischetsrieder says VW plans to build between 200 and 300 Veyrons, although he's not yet happy with the way the car handles.
Meanwhile, the Phaeton, the VW-branded car that's supposed to compete with Mercedes, looks suspiciously like an upgraded Passat. It hasn't sold as well as expected. This year, VW will make just 7,841 Phaetons, although the factory has capacity to make 20,000. VW had hoped the Phaeton would be profitable next year; now it says the Dresden factory won't break even until late 2004 or 2005. "You can't get people to pay a very high price for a VW, however good the car," says Merrill Lynch's Reitman. Pischetsrieder calls the Dresden Phaeton plant "a beautiful factory that's not utilized enough. The car is excellent. But we need to convince customers that VW can do this."
Piech's most promising purchase is Bentley. The first new Bentley under VW, the $150,000 Continental GT, is sold out until April 2005. "I am very confident that Bentley will make money," says Pischetsrieder—at least in 2005. Yet VW knows that making Bentley a mass luxury brand, selling up to 9,000 a year, won't be easy.
As he tries to develop a more coherent brand strategy, Pischetsrieder is also tinkering with Piech's platform strategy, which had several cars built on one platform. Now VW is breaking that down further into "modules," smaller parts such as air conditioning systems or engines, so it can make more cars with fewer parts. The trick, of course, is to keep the cost of parts down while maintaining product differentiation. To do that, Pischetsrieder is putting more emphasis on design.
There are signs this is working. Analysts who talk to car buyers say they perceive Seats, Skodas, VWs, and Audis differently, even if many of the cars share the same engines, suspensions, or floorplans. JD Power, which measures what car buyers think about cars, says buyers perceive Seat as a sassy young brand, Audi as high-tech and stylish, VW as dependable and straightforward, and Skoda as delivering good value for money. "I hear all this talk that all these cars from VW are similar, but I don't think customers perceive that," says David Sargent, a partner at JD Power. "We know that what is under the skin of a Seat Leon is somewhat similar to what is under the skin of a Skoda Octavia or a VW Golf or an Audi A3. But customers don't see these things."
If that continues to be the case, Pischetsrieder has a good chance of fulfilling Piech's ultimate dream. "It's my personal conviction that I have to complete his vision," he says. Piech wanted to make VW into one of the globe's top three auto companies, with different brands offering different products to every potential customer. "If someone asks me what is the best car company today, I say 'Toyota,' " Pischetsrieder says, "because no one does their job better. In two or three years, if people say we are among the best three car companies—not just in terms of figures, but also in terms of strategy—we will be proud of that."
------------------------------------------------------------------------------------
VOLKSWAGEN
Getting the Bugs Out at Volkswagen
Declining share, falling profits, too many brands—can VW's new boss get the company back on track?
FORTUNE
Monday, September 29, 2003
By Janet Guyon
The night before the Frankfurt auto show last month, Volkswagen CEO Bernd Pischetsrieder seemed anxious. Two weeks earlier, VW had unveiled its latest redesign of the Golf, the company's biggest-selling car, and the next day it would be on display for hordes of international auto writers. Good Golf reviews are essential to VW's future financial health. Asked how he was doing, Pischetsrieder replied, "I'd prefer to answer that question after the show is over."
How well the new Golf sells remains to be seen, but Pischetsrieder has good reason to be nervous. The world's fifth-largest car company is losing market share to Japanese and other European manufacturers, its profits are deteriorating, and it's suffering from a multiplicity of brands and models, including several at the high-end of the car chain, where the "people's automaker" has never gone before. And the new CEO has to fix all that with his predecessor looking over his shoulder.
On the job just 18 months, Pischetsrieder succeeded a legend, Ferdinand Piech, the Porsche scion who pulled VW out of a tailspin in the early 1990s. At VW's annual meeting in April 2002, Piech was honored with a standing ovation on his departure, but he made it clear that Pischetsrieder was his handpicked successor. Piech met Pischetsrieder when the latter ran BMW and the two fought over which company would get Rolls-Royce and its Bentley brand. VW took Bentley, BMW took Rolls, and Piech was taken with Pischetsrieder. "He was able to favorably guide negotiations and get that piece of the cake he wanted," Piech said before turning over the reins. "At the the end, I got both things I wanted. I got Bentley—and I got Pischetsrieder."
But while Piech reinvigorated VW with the new Beetle, quality improvements for its Seat and Skoda brands, and a system of platform engineering that helped it make more cars with fewer parts, he didn't meet his financial goal of a 6.5% return on sales. And he left Pischetsrieder with the legacy of his $1 billion rush toward luxury. Not only did Piech buy Bentley, he bought Bugatti and Lamborghini, and he built a $200 million glass-walled factory in Dresden that last year began making the $75,000 Phaeton, a luxury car that's supposed to put VW in the same league as BMW and Mercedes.
All that spending now is viewed as the self-indulgence of a man with gasoline in his veins. It diverted engineering talent from bread-and-butter models such as the Golf and Passat and from hot new product niches such as SUVs and multipurpose vehicles that VW is getting into only now. While Golf sales are declining, that model alone accounts for 15% of the five million cars and trucks that VW makes. Yet it wasn't until this fall that the company came out with a new version, seven years after the last one went into production. (The new Golf is longer, wider, and taller, but it doesn't look much different from the old one.) VW won't update the existing Passat, its second-biggest seller, until 2005.
To get VW back on track, Pischetsrieder must undo some of the legacy of the man who put him in the job—and who is still chairman. That's a tall order, because even though Piech voices his support publicly, he clearly expects Pischetsrieder to carry on where he left off.
So far Pischetsrieder is saying the right things. His first priority, he says over dinner in Frankfurt, is cost. He wants VW to achieve returns on investment greater than the cost of raising capital, something it failed to do last year. "We have so many fantastic plans, but we can't pursue them all if we continue to spend so much money," says Pischetsrieder. "I don't know if this is a vision, but I want the company to earn more money." Indeed, last year's results were a damper on the record results Piech achieved in 2001. Sales fell 1.8% to $82 billion, and operating profit fell 12% to $4.5 billion. Results this year will be worse, VW warns. "They've got a cost problem," says Stephen Reitman, an auto analyst at Merrill Lynch in London, who says he doesn't expect VW to meet its cost of capital until 2006.
VW also has a market-share problem. Last year it lost ground in its four biggest markets: Germany, China, the U.S., and Brazil. The American market has been particularly tricky. The new Beetle made a big splash when it arrived five years ago, but sales are tapering off. And the car market has been flooded with cheap financing. VW has refused to match the sales incentives of the American automakers. The resulting drop in volume has meant that VW's operating profit in North America fell to $65 million, from $769 million, in the first half of 2003. "I don't think it's the right thing to buy the market," Pischetsrieder says. "We'd rather keep our margins."
In Europe, where competition is brutal, VW has seen a drop in both market share and unit sales. It is being hammered by Japanese, French, and even American automakers. GM Opel's new Astra, for instance, has been favorably reviewed against the new Golf. In China, VW faces a different problem: Sales were up 43% last year, but market share was down. In order to regain its position, Pischetsrieder says, the company will have to invest $6 billion over the next four to five years.
The key to reviving VW, of course, is to make more cars that more buyers want to buy. To do that, Pischetsrieder has put some discipline into product planning, creating a central product-strategy committee that decides which brands attack which niches rather than allow VW, Skoda, Seat, and Audi to compete with one another. "I want every brand in its own segment and niche, and everywhere excellent design," he says. Executing a Piech idea never put into practice, Pischetsrieder has created two brand families within the company, the traditional VW family and the sporty Audi group.
He has also put new emphasis on design and marketing and pushed responsibility for creating a global image down to the individual brands. That, as well as making each brand responsible for its own sales, resulted in the high-profile departure last spring of Robert Buechelhoffer, a former BMW board member who was Piech's top marketing man and who, some say, didn't get along with Pischetsrieder. "It wasn't necessary to have one board member coordinate sales and marketing," says Pischetsrieder, who denies any personal friction. "It made it more difficult to give more responsibility to the brands."
Most car mavens believe Pischetsrieder, 55, is up to the job. An engineer by training, he calls himself a "petrol head" like Piech. Unlike his predecessor, he is more affable and approachable. And he cares about the financial markets. Analysts say VW has become more communicative, holding regular conference calls, and its financial statements are less opaque. Because VW is 18% owned by the state of Lower Saxony, which is more concerned with jobs than profits, Piech never took shareholder interests to heart. He just wanted to build great cars.
The one black mark on Pischetsrieder's resume—his ouster from BMW in 1999 for the failure of its 1994 Rover acquisition—doesn't seem to have hurt his reputation. Pischetsrieder spent 26 years at BMW, the last six as CEO, and his record there was otherwise impressive. BMW's initial strategy to diversify into mass-market cars looked better on paper than in reality, says John Lawson, auto analyst at Citigroup in London. After the purchase, the rise of the pound against the deutsche mark hurt Rover sales by making them more expensive relative to German luxury cars. "You could simply blame Pischetsrieder, but it would be a gross oversimplification," says Lawson. "BMW bought something they didn't understand." Of the Rover debacle, Pischetsrieder says, "I still think strategically it was the right choice."
One of BMW's problems with Rover was that the two brands didn't share a common culture or even similar parts. That's not true at VW. In fact, sharing common parts and technologies is a key element of both Piech's and Pischetsrieder's strategy to keep costs down. Parts of the Phaeton air-conditioning system are shared with the new Bentley Continental GT and the Audi A8. Pischetsrieder is also driving a common culture by moving managers around to run different brands. The former head of Audi now runs Bentley as well as global R&D, while the former head of Skoda sales and marketing is now in charge of VW brand marketing and distribution. Every top manager is being paid according to how well the entire group meets return-on-investment objectives.
Pischetsrieder says his strategy in branding and marketing, as well as production, is a "refinement and execution" of many of the ideas that Piech had. "I wouldn't have joined the company if I didn't agree with his strategy," he says. Indeed Piech first revealed the idea of forming two brand groups in a FORTUNE interview in 1999, when he sketched an X with Seat leading up to Audi, Bentley, and Lamborghini from the lower left to upper right and Skoda leading up to Volkswagen and Bugatti from the lower right to the upper left. Under Pischetsrieder, the Audi, or sporty, group consists of Seat, Audi, and Lamborghini, while the traditional VW family consists of Skoda, VW, Bentley, and Bugatti.
So far, there is little to show for the work of Pischetsrieder's product-strategy committee, which has been operating for about a year, mainly because it takes several years to develop new products in the car industry. "They're still dealing with a lot of decisions which were set in concrete some time back," says Reitman of Merrill Lynch. But executives say the committee has determined that certain brands will stay out of certain niches. Pischetsrieder is making all the final decisions. "If Audi wants to do a sports car in a specific price range," says Franz-Josef Paefgen, the Bentley CEO, "they take it to the committee, and Pischetsrieder may say 'No' because Bentley is doing it." In the past, if Audi could show that the new model would make money, Piech would have given it the green light.
Soon after he took over, Pischetsrieder said that Piech's approach created too many "hatchbacks, notchbacks, and long- backs," and too few SUVs, minivans, roadsters, and other profitable lifestyle niches that VW missed. "Rather than everyone chasing the hatchback market, some brands will chase certain segments," says Adrian Hallmark, director of sales and marketing at Bentley. For instance, Audi plans to use the platform of the new VW Touareg SUV, which has a six-month waiting list, to build an SUV of its own called Pikes Peak beginning in 2006. But Skoda and Seat will not be selling SUVs, at least not in that size, says Pischetsrieder. Meanwhile, to attack the roadster segment, VW and Audi each showed two-seaters at the Frankfurt auto show. Both may be built. "For Audi, Seat, and VW it would be fine to be in that segment," says Pischetsrieder—"just not in the same price, size, and performance category."
That all makes sense. What doesn't is VW's drive toward luxury, a strategy Piech believed would enable VW to get more pricing power. Bugatti has launched a $1 million, handbuilt Veyron sports car with a 1001 horsepower engine that can accelerate from zero to 62.1 miles per hour in just three seconds. Critics say the Veyron won't generate enough sales to make all that muscle worth the cost of developing it. But VW insists it will break even. "This is a product for car fanatics," says Pischetsrieder. "The next model will have to make money." Pischetsrieder says VW plans to build between 200 and 300 Veyrons, although he's not yet happy with the way the car handles.
Meanwhile, the Phaeton, the VW-branded car that's supposed to compete with Mercedes, looks suspiciously like an upgraded Passat. It hasn't sold as well as expected. This year, VW will make just 7,841 Phaetons, although the factory has capacity to make 20,000. VW had hoped the Phaeton would be profitable next year; now it says the Dresden factory won't break even until late 2004 or 2005. "You can't get people to pay a very high price for a VW, however good the car," says Merrill Lynch's Reitman. Pischetsrieder calls the Dresden Phaeton plant "a beautiful factory that's not utilized enough. The car is excellent. But we need to convince customers that VW can do this."
Piech's most promising purchase is Bentley. The first new Bentley under VW, the $150,000 Continental GT, is sold out until April 2005. "I am very confident that Bentley will make money," says Pischetsrieder—at least in 2005. Yet VW knows that making Bentley a mass luxury brand, selling up to 9,000 a year, won't be easy.
As he tries to develop a more coherent brand strategy, Pischetsrieder is also tinkering with Piech's platform strategy, which had several cars built on one platform. Now VW is breaking that down further into "modules," smaller parts such as air conditioning systems or engines, so it can make more cars with fewer parts. The trick, of course, is to keep the cost of parts down while maintaining product differentiation. To do that, Pischetsrieder is putting more emphasis on design.
There are signs this is working. Analysts who talk to car buyers say they perceive Seats, Skodas, VWs, and Audis differently, even if many of the cars share the same engines, suspensions, or floorplans. JD Power, which measures what car buyers think about cars, says buyers perceive Seat as a sassy young brand, Audi as high-tech and stylish, VW as dependable and straightforward, and Skoda as delivering good value for money. "I hear all this talk that all these cars from VW are similar, but I don't think customers perceive that," says David Sargent, a partner at JD Power. "We know that what is under the skin of a Seat Leon is somewhat similar to what is under the skin of a Skoda Octavia or a VW Golf or an Audi A3. But customers don't see these things."
If that continues to be the case, Pischetsrieder has a good chance of fulfilling Piech's ultimate dream. "It's my personal conviction that I have to complete his vision," he says. Piech wanted to make VW into one of the globe's top three auto companies, with different brands offering different products to every potential customer. "If someone asks me what is the best car company today, I say 'Toyota,' " Pischetsrieder says, "because no one does their job better. In two or three years, if people say we are among the best three car companies—not just in terms of figures, but also in terms of strategy—we will be proud of that."
10-31-2003, 11:05 AM
#29
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
"Indeed Piech first revealed the idea of forming two brand groups in a FORTUNE interview in 1999, when he sketched an X with Seat leading up to Audi, Bentley, and Lamborghini from the lower left to upper right and Skoda leading up to Volkswagen and Bugatti from the lower right to the upper left. Under Pischetsrieder, the Audi, or sporty, group consists of Seat, Audi, and Lamborghini, while the traditional VW family consists of Skoda, VW, Bentley, and Bugatti."
So I created a quick diagram in Powerpoint of what this would look like, cos I think it's important, because THAT was Piech's vision of VW before they even bought Bugatti and Bentely and Skoda. Here it is:
So I created a quick diagram in Powerpoint of what this would look like, cos I think it's important, because THAT was Piech's vision of VW before they even bought Bugatti and Bentely and Skoda. Here it is:
10-31-2003, 12:13 PM
#31
Advanced
Join Date: Sep 2003
Location: Red Bank, NJ
Posts: 62
Likes: 0
Received 0 Likes
on
0 Posts
Volkswagen seems to like to name all thier cars after things like winds and water currents. I'm fine with that. I love my car, even though Volkswagen Of American and thier Policy towards modding sucks!
10-31-2003, 12:17 PM
#32
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by agisd
gav, wtf?
this X is not correct...the blue arrow is Skoda, VW, Bentley and Bugatti!!!!!!
gav, wtf?
this X is not correct...the blue arrow is Skoda, VW, Bentley and Bugatti!!!!!!
Are you sure?
Read again:
"...when he sketched an X with Seat leading up to Audi, Bentley, and Lamborghini from the lower left to upper right and Skoda leading up to Volkswagen and Bugatti from the lower right to the upper left."
10-31-2003, 12:21 PM
#33
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by jimcol711
the other problem VW has is their fucking stupid naming now.. whats with creating names that look and sound stupid and most people pronounce differently. thats just bad business. im all for originallity in naming of vehicles but to make up stupid words or use words from languages that no one is familiar with cant be good for business, it just makes people lose intrest because of their confusion
the other problem VW has is their fucking stupid naming now.. whats with creating names that look and sound stupid and most people pronounce differently. thats just bad business. im all for originallity in naming of vehicles but to make up stupid words or use words from languages that no one is familiar with cant be good for business, it just makes people lose intrest because of their confusion
On another note, I think even the Tuareg was not a...totally, good idea from VW. They made it "too good" (if such a thing is bad) and naturally it costs a lot cos it's so well made. Plus IT"S WAY LATE in the game! So combining all of the above, I cant say that this new SUV is entering the market with the best of circumstances for sales success. I hope I am wrong, but it does not look good.
10-31-2003, 12:27 PM
#34
Advanced
Join Date: Sep 2003
Location: Red Bank, NJ
Posts: 62
Likes: 0
Received 0 Likes
on
0 Posts
I think VW has alot of brand loyalty, people love the culture of VW, the way you honk and wave to each other etc. Maybe they are hoping that as these people are getting older they will want an SUV and a luxury sedan.
10-31-2003, 12:29 PM
#35
Advanced
Join Date: Sep 2003
Location: Red Bank, NJ
Posts: 62
Likes: 0
Received 0 Likes
on
0 Posts
10-31-2003, 12:53 PM
#36
Advanced
Join Date: Jun 2002
Location: Toronto
Posts: 96
Likes: 0
Received 0 Likes
on
0 Posts
Originally posted by gavriil
Are you sure?
Read again:
"...when he sketched an X with Seat leading up to Audi, Bentley, and Lamborghini from the lower left to upper right and Skoda leading up to Volkswagen and Bugatti from the lower right to the upper left."
Are you sure?
Read again:
"...when he sketched an X with Seat leading up to Audi, Bentley, and Lamborghini from the lower left to upper right and Skoda leading up to Volkswagen and Bugatti from the lower right to the upper left."
Read again the full paragraph...
10-31-2003, 03:25 PM
#37
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Originally posted by agisd
Bentley must be in blue since it belongs in the classic stream...
Read again the full paragraph...
Bentley must be in blue since it belongs in the classic stream...
Read again the full paragraph...
"Seat leading up to Audi, Bentley, and Lamborghini from the lower left to upper right"
So where is the problem?
Are you disagreeing with Piech, or are you saying I drew it wrong?
10-31-2003, 05:51 PM
#39
Suzuka Master
Maybe VW should try a marketing/brand pyramid. Skoda & Seat would be at the bottom, then moving up VW, then Audi, then Bentley, Lambo, and Bugatti at the top. That "X" illustrated how confusing and haphazard their marketing message is.
No doubt, the Phaeton is a great car. But VW should have positioned it as an Audi & used to reinvigorate the brand and to help further Audi's cachet so that it's Audi is more likely to be perceived as being on par with BMW or Mercedes-Benz. This car costs two and a half times as much as an entry level Audi. Calling it a VW will only diminish the public's perception of the car.
No doubt, the Phaeton is a great car. But VW should have positioned it as an Audi & used to reinvigorate the brand and to help further Audi's cachet so that it's Audi is more likely to be perceived as being on par with BMW or Mercedes-Benz. This car costs two and a half times as much as an entry level Audi. Calling it a VW will only diminish the public's perception of the car.
11-01-2003, 08:52 AM
#40
Kabachitare!
Join Date: Jul 2003
Location: Bay Area
Posts: 936
Likes: 0
Received 0 Likes
on
0 Posts
Good car, but I bet they won't sell many in the US. Most consumers will think,"Oh, just a cheap VW" even if it does have a 75K pricetag. If this car was an Audi I can see them carving out a good niche but as it is with a stupid name I think it will be piling up in the VW dealerships. Which is a pity, I think it is a decent car whose positioning/marketing has gone seriously astray.
