Go Figure: Volkswagen Targets SUV Growth to Boost Sales in U.S.

#VW, #CR-V

A new midsize car is already on the way, but Volkswagen is targeting extra growth in the SUV ranks to help acquire more customers in the United States auto market.

Bloomberg recently interviewed Volkswagen’s U.S. head Jonathan Browning to see where the German marque was looking to gain sales.

“We will be looking to really grow, particularly in the compact SUV segment,” said Browning. “Over time, I think there’s also scope for growth in terms of a larger SUV within the portfolio.”

The compact crossover segment’s sales numbers speak for themselves. In 2010, the utilitarian yet well-respected Honda CR-V sold 203,714 units. The Toyota RAV4 grabbed 170,877 sales; the Chevrolet Equinox managed 149,979 (platform twin GMC Terrain achieved 60,519). Long overdue for a replacement, the Ford Escape still watched 191,026 vehicles move to new owners. For comparison, VW’s relatively unknown Tiguan saw just 20,946 CUVs change hands. Clearly, the customers are waiting.

Browning’s talk of a possible larger SUV doesn’t bode well for the Touareg. The midsize SUV has the feel of a premium product, including a very premium starting price tag of $45,270. VW sold just 4713 Touaregs in all of 2010, though some would argue its lack of a third row is a big influence on this segment’s buyers. A proposed full-size SUV would presumably possess the extra seats, but it’d likely need to see production at VW’s new plant in Chattanooga, Tennessee, to have a sustainable price.

“We’ve got plenty of ideas in terms of new product entries,” continued Browning. “It’s very important that we build a balance of our product portfolio in the U.S.”

All this product talk comes as VW continues to eye its million-unit U.S. sales goal for 2018, with 200,000 coming from Audi sales. Last year, VW sold 256,830 vehicles, good for an 11-percent market gain led primarily by the compact Jetta. In addition to revamped SUVs, the upcoming New Midsize Sedan (to be unveiled at the Detroit show) is also a critical component of VW’s master plan. The NMS will be assembled in Tennessee and is expected to make up a hefty chunk of sales in the future.

The Tiguan is powered by VW’s popular 2.0-liter TSI straight-four with 200 horsepower, and starts at $24,305 (includes an $820 destination charge) with a six-speed manual. Pricing is definitely a hurdle in the Tiguan’s attempt to move up the ladder, but could it add anything else to make it more appealing to its target demographic? Give us your opinions in the comments section below.

The key here, is offering the manual transmission WITH 4 wheel drive and the TDi - it would be alone in the marketplace - and bring back the 2.0t stick shift jetta sportwagen already. Why does VW not want to sell any of it's good stuff here? I own two (08 jetta, 09 Passat) what will I buy next? Unknown - the only German VW in the U.S. the the GTI, and it's too small - My 08 Jetta is not German, and it shows thru and thru...... WAKE UP VW!
Oh...I forgot!!! Now that no company sells a compact pick-up truck, The Amarok will definitely be a winner...IF AND ONLY IF...the TDI engine is an option. And with the price of gas fore casted to go up to ~$5 a gallon within the next year or so, bring over the diesel Polo and the hybrid electric-diesel Golf. I own 2 diesel Golfs now (02 and 10), but with my growing family, I am in the market for something a little bigger. My only choice is an 05/06 Jeep Liberty diesel. I absolutely refuse to buy a gas powered vehicle. VW...ARE YOU LISTENING?!?!
The 4-cylinder diesel engine making between 160-180 horsepower and a 6-speed manual transmission option. They will not be able to keep up with demand.
The Tiguan is overpriced with poor gas mileage and a rather unappealing appearance from the side and front-end. As stated by others previously, the euro option TDI's would go well but a modified (read improved) 4 banger is also a must. Wheel base for me is fine but a tad more cargo room behind the rear seat would be very welcome. Look at Kia's new turbo four soon to be available in the Sportage and compare the whole package- and its warranty- to that of VW and the Tiguan. Kia wins. Make and market the Tiguan as a more rugged and off road capable vehicle with improved pricing and warranty and you have a winner. Listen up VW, you DO NOT have to be as cheap nor long warrantied as Kia but you do need to be somewhere in between where you are now and where they are. If you do I will buy it if I have not already bought something else.
Oh I meant to say that building vehicles in Mexico would help the cost issue, not necessarily reliability.
I think VW has two major problems. First, their vehicles are too expensive relative to the competition and Second, they have a bad track record with reliability. Building vehciles in Mexico or the US should help solve that problem. As for their current line up, call the New Midsize Sedan the Passat. Passat has good brand value and nobody will care if its not the same vehicle as sold in Europe. Offer a coupe version. It would probably do well up against the Honda and Nissan midsize coupes. Aslo, VW needs to fill its gaps in the market. For example, bring over the Polo, (build it in Mexico if it makes more sense). VW is one of the few major automakers without a B segment offering. Also bring over their compact truck. With Ford and GM getting out of the segment, there may be room for VW's offering. Add some halo vehicles. Bring over a sporty roadster or something. Redesign the VW New Beetle with an eye toward the MINI and Fiat 500 (cute retro hatches do sell, the Beetle just needs a new angle). Finally, add a halo green car, which would be comprable to Toyota's Prius and GM's Volt. Make it look Hybrid-ey. I gurantee if they added those models, improved reliability, and cut costs but not content, their sales will skyrocket.
As Henry states, adding both regular TDI and BlueMotion options would do it for an awful lot of us. These products are available in Europe, and getting them certified for US emissions would be an inexpensive way to add a lot of value to the vehicle. Bring in the Tiguan TDI's with manual transmission and my Tacoma will be gone in a flash. Larger version SUV would not be a large seller, fuel prices are only going up, and people are starting to shop for better mileage in all categories of vehicles. The Amarok would be a better choice for next model catergory to enter. Put TDI's and GLI type spec into All current models and see which sell well, you might be pleasantly suprised.
Henry Plaziuk
The solution to increase the Tiguans sales is what Europe already have a TDI diesel version, TDI 2wd Blue Motion =53.3 MPG TDI 4 motion =44.8 MPG There is a Sports version too, Enough said?This would compete with the Honda and Rav 4 sales A Larger SUV thatn the Tourag, No,absolutely not,it would fail.
It would really be helpful if the Tiguan offered more rear leg room and were a little longer wheelbase. The product offering seems to be a good value at first glance however, when some of the desired amenities are added the vehicle becomes overpriced for the target demographic.

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