VW Focused on Prices, Quality

May 14, 2007
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Have you driven a VW lately? Okay, so I’m mixing ad metaphors here, but the point remains, when did you last drive a Volkswagen? If it’s been awhile, Adrian Hallmark can’t really blame you. The CEO of Volkswagen of America admits the company generated a lot of “venom” with the massive quality problems it experienced earlier this decade.

Now, add the fact that recent models haven’t been all that exciting – and yet they’ve carried a sizable premium compared to other mainstream marques, such as Toyota or Nissan – and, well, now you understand why the company has been losing sales and a lot of money in the U.S. market.

So, how does VW turn things around? Start by asking a lot of fundamental questions, as it did, several years ago, with Project Moonraker. Based in the L.A. suburbs, the program looked as much at what VW was doing wrong more than what was going right. And the answer was: lots. The question that it raised was how do you fix things?

In a long and surprisingly revealing interview, Hallmark tells TheCarConnection.com that there will be a lot of changes coming. Key products, notably the Jetta and Passat, will be repositioned, meaning price cuts of perhaps $5000 a vehicle. And there’ll be a number of new products coming. Not just the second-generation Touareg, which we review this week, nor the Tiguan, the second, upcoming VW SUV, but also high-style models like one codenamed CC.

Hallmark confirms for TheCarConnection that this “coupe-like sedan” will be added to the lineup late next year. And it will drop into the price ladder about where the current Passat sits today. That’s a significant discount compared to the striking Mercedes-Benz CLS, the first of the latest batch of so-called four-door coupes.

At the other end of the spectrum, VWoA is likely to start importing the tiny Polo, arguably a perfect antidote to the rise in fuel prices. The company is even contemplating a “reevolution” of the Beetle, reveals Hallmark, going back to the iconic nameplates roots as a super-cheap, super-efficient model.

Now, of course, none of this will do much if VW can’t get its quality under control. But if internal corporate numbers are to be believed, defects per vehicle have plunged fourfold in the last three years. On the Touareg, the numbers are even more impressive, the “problem” count down fivefold in two years.

It’s likely to take time to win back angry owners – if they ever trust VW again. But there are signs that the automaker may just be back on track.

2008 Volkswagen Touareg2—TheCarConnection.com

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