|Quote, originally posted by knicks125 »|
As mentioned earlier, one of the biggest obstacle VW has to overcome is the cost issues, and I should also correct myself, exchange rates VW has little influence over. But, if, and once everything sorted out, the potential benefits of these small cars could be vital to VW's short and long term growth. It should be noted profitability on these cars are marginal but these small cars can bring indirect benefits to others in the portfolio.
Well said. The margins are pretty thin in this category but they need some sales momentum and some fresh brand equity in the worst possible way!
Personally, I think Chinese or Mexican assembly could make these a perfectly viable sales proposition and a potential hit here in the States. There's no "affordable" German car worth driving anymore and VW has pretty much squandered the youth and energy that the original Rabbit GTI brought to the brand. They could fill the entry German performance niche and inject some much-needed brand equity with a solid little Lupo GTI.
Imagine what it would take: No frills spec with some bolstered fabric seats, bigger wheels and tires, an honest performance suspension, a tight 6-speed manual, an air-dam, five or so extra horsepower and a price every new college grad could afford (say, $16,000?). I think that and a pinch of sharp marketing would be Volkswagon's *instant* redemption in this country.
Unfortunately, VW is so obsessed with moving upmarket at the moment (and cannibalizing Audi) that they're missing these opportunities to re-generate volume and revitalize the brand. Sure, the margins are slim and hatches are seen to be a risk, but damn, their dealers are dying and I don't think the push upmarket will ever have chance without shoring up the foundation: Solid, high-value, fun-to-drive cars like a Lupo GTI.