VW's model moves.
What this is doing is providing VW with some addition head room in this class, which includes cars like the Pontiac G6 coupe and the Volvo C70 (see AD & P, November 2005 or http://www.autofieldguide.com/articles/wip/1105wip01.html), as the base Eos starts at $27,990, the 3.2L starts at $36,850 and goes to $37,500 as the 3.2L Sport.
While they're increasing with the Eos, as Adrian Hallmark, executive vice president, Volkswagen of America, has indicated, the company is looking for the ways and means to have more cost-competitive vehicles in some of the categories in which it competes (see AD & P, September 2005 or http://www.autofieldguide.com/articles/090603.html). According to Matthias Seidl, chief operating officer of Volkswagen of America, whereas the model year '06 Golf had a price range of $16,030 to $20,655, the model year '07 Rabbit (same model, different moniker) has a price range of from $14,990 to $18,065. Similarly, the '06 Jetta ranges from $17,900 to $29,350 while for the '07 it is from $16,490 to $26,060. Seidl says he hopes that this will continue the positive traction that the company is experiencing in the U.S. market: He notes that through October, the total industry was off 2.9% in the U.S. but V.W. was up by 9.9%.
Couldn't there be a problem by taking models off of the top end? According to Jim Hall, vice president at consultancy AutoPacific, there are manifold cost savings associated with taking out some of those high-end Jettas. He points out that in the broad scheme of things, the number of units sold is minimal and that by eliminating from the mix, it not only minimizes manufacturing complexity, but also reduces logistics costs, thereby putting the company in a better competitive position.
As for the Eos, which is the number-one car in the segment in Germany, they have an allotment of 12,000 units for the U.S. market. Seidel estimates that 20% of those sales will be for the 3.2L. So it is clear that VW is not making a downmarket move, but intends to compete on what he calls "Volks-Pricing."--GSV
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|Author:||Vasilash, Gary S.|
|Publication:||Automotive Design & Production|
|Date:||Dec 1, 2006|
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