We didn’t really need any further proof that Ferdinand Piëch was an aficionado of power—raw, distilled, and in all its wacky shapes and varieties. But now that this triple Type A personality has once again cemented his dominion over the Volkswagen empire, a series of bold statements by the company that it will and must become the world’s largest carmaker have us thinking that they have got to be kidding.
It’s not that Volkswagen isn’t broadly poised to take a run at the global sales crown—it makes a lot of cars and clearly has plenty of smarts—but you’d think the recent experiences of the world’s last two Number 1’s—Toyota and General Motors—would be all it took in the way of cautionary examples to keep VW’s world-domination ambitions in check. Or at least to itself. As both the Japanese and American companies might attest, sales supremacy ain’t all it’s cracked up to be. Indeed, the relentless pursuit of volume would appear to have had a direct, corrosive effect on quality, profitability, internal cohesion, and, ultimately, their abilities to hang on to their number-one status.
Such failures are not in themselves justification for stifling potential growth; GM and Ford before it had pretty nice rides before mislaying the plot to be the world’s largest car company. But there’s good reason to ask whether Volkswagen, having begun its forced march to the mountaintop, hasn’t already forgotten what made it a player in the first place. Here in America, at least, where its goals for the VW brand alone are very ambitious—it hopes to more than triple its sales to 800,000 units a year by 2018—the signs are not encouraging.
It wasn’t always thus. With its sales mired in the doldrums, Volkswagen began its modern resurgence with the 1998 Passat and the 1999 Jetta. Although not the cheapest cars in their classes, both the Passat and the Jetta scanned as significantly better cars than their price would indicate. Credit goes to the cars’ interiors, which outclassed all their American and Asian competition and, amazingly, even smoked luxury European marques like Mercedes-Benz. At the time, Mercedes was in the midst of a misguided attempt to grow sales by making its cars cheaper and was busy extracting cost from its cabins—where it showed.
It’s strange, then, that lately Volkswagen has adopted this same tack, trying to grow its American sales volume by making cars sold here cheaper to build and buy. It shows.
The outgoing Passat was introduced for the 2006 model year. Despite being both bigger and less expensive than the car it replaced, its American sales volume fell precipitously, with only 12,500 shifted last year, down from an all-time high of 96,000 in 2002. This early warning hasn’t been heeded; rather, VW has doubled down. The new 2011 Jetta, with VW’s prehistoric 2.0-liter base engine and a special, cruder rear suspension for America, has VW loyalists here fuming. A depressing reminder of exactly what the express trip back downmarket looks like could be seen at VW’s Detroit show stand, where the Jetta’s rear seatback was flimsy enough to stand out in a Chinese taxi, much less a German-designed model that was once synonymous with top-shelf interior quality. As I took in the Hyundais at a nearby show stand, cars that felt classier for still less money, it occurred to me that here was a more plausible contender for future number-one honors, with no boasting needed. Meanwhile, the new-for-2012 North-America-only Passat, to be built in Chattanooga, Tennessee, and also shown in Detroit, is bigger and cheaper than the model it replaces. But it’s still an unmistakably lesser car than the full-strength German Passats the rest of the world will buy.
Can it really be that the road to 800,000 U.S. sales begins with offending the 257,000 customers VW drew last year by offering them crappier cars? Maybe. But history—especially Volkswagen’s own—suggests that quality products and consistent standards of excellence make brands, while their sudden absence can break them. Once broken they’re not easily mended, as VW knows all too well.
Illustation: Tim Marrs