Volkswagen Isn't Thinking Small Enough (Or Maybe It's Thinking Too Small)
The company appears to be losing its way in America.
A celebrated Volkswagen ad of the 1960s invited potential customers to "Think Small." It's half a century later now and Volkswagen, with its hefty Atlas and inflating Tiguan SUVs, plus the ever-growing Passat and Jetta, appears to have pretty much forgotten its own advice. The recent death of the New Beetle was a not unexpected sign, but the recent decision to kneecap the Golf range in the U.S.—importing only the most expensive GTI and R model Golfs—more than reinforces the suspicion. It hurts.
Of course, most Americans have long since forgotten the then fledgling German company's sensible admonition to save money and gas by not driving more car than one needs. To, you know, think small. But this was the idea that the dumpy original Beetle drove into the zeitgeist, air-cooled rear-mounted engine and all. This was the essence of Volkswagen and it appealed strongly to that 30 percent of the population who just weren't buying the Detroit paradigm. A group who, largely thanks to Volkswagen, became the American audience for foreign cars.
Driving unnecessarily large vehicles has become a national pastime again today, just like it was in the 1950s and early 1960s, when growing awareness of air pollution and the profligate chrome and tail fins by the acre also drove Americans into Beetles by the millions.
Yet with all we know of climate change and the world community's push to cut carbon emissions, the current urge to upsize seems counterproductive. The need for something like the Beetle of yore becomes clearer by the day. The Prius has staked some of that space, but there's more room. And yet the Germans and Japanese are convinced that Americans only want it bigger.
To listen to VW explain it, it has to think large to do anything about increasing its U.S. market share to something more closely approximating large. But I think that by just thinking large it has begun thinking small.
The latest proof? The quietly floated news that it will no longer sell America its international bestseller, the standard Golf. With this own goal, VW all but throws in the towel in North America on the model line that best represents its heritage and has frequently constituted its best, most carefully engineered car. With it, the Wolfsburgians throw the America towel in, too, on smaller (though hardly small, as the Golf has grown) cars. Thereby completing Volkswagen's corporate makeover in the U.S. from purveyor of fine German cars of reasonable dimension to an ordinary maker of dumbed down, large, America-only cars of the sort Germans think Americans might like to buy at higher prices than they're prepared to pay for their European-style sedans and hatchbacks.
Can a large VW pickup be far behind?
This is not to knock Volkswagen's efforts for fuel economy—the new Jetta is outstanding in this regard. It's not to diminish its demonstrated commitment to electric vehicles, which is real and important even if it was the result of being forced to after getting left holding the bag for an entire industry of cheaters in the Dieselgate caper. The last chapter has not yet been written. And the Golf R I drove recently was splendid, fast, and capable, though at roughly $40,000 to start a little spendy and then some.
Nor is it that there's nothing to recommend Volkswagen's sedans and its SUVs. Just not enough. A Golf is special. An Atlas is not. It does nothing for the genre except recapitulate what has been done by others, often to better effect. VW has taken on a highly mature market for family SUVs and acquits itself well enough, but it doesn't sparkle particularly in any area or dislodge existing models in the space. We also only get the largest of global Tiguans, the three-row model.
And what if you want to buy a Volkswagen of modest size? You'll be looking elsewhere. The industry has grown scared of the future and with fear comes the greed borne in shortsightedness and panic. There's less money in small cars than there is in big ones (another principle that shouldn't be sacrosanct). So companies are walking away from a type of vehicle whose longstanding constituency has outlasted all previous fads.
Ford, GM, and FCA have quit the space, and now VW, leaving a large opening in the popularly priced four-door hatch market. It will be filled with more SUVs, perhaps, but also by the excellent Mazda 3 , Toyota's much-improved Corolla, and cars from Hyundai, Kia, and others. How ironic, though, that Volkswagen would remove the Golf—arguably the only clear segment-winner it makes—from its American attack. Then again, not much different than when it failed to market the car—at all—for the last 20 or 30 years.
The death of the box-stock Golf in America speaks to this moment in automotive industry history and to Volkswagen's long-term misunderstanding of this market and its place in it. Lately, too, the maker of the People's Car has fallen victim to the American industry's underlying disease, the notion that you run a successful business by making money on high-margin items only, so therefore you must dispose of all your lower profit volume. It's like a diet made up entirely of desserts. It doesn't work that way and it's not good for you.
VW forgets finally that the most visible and enthusiastic part of its young fan base isn't drifting Atlases and slamming Tiguans. Rather they're loving the small stuff, the stuff VW used to think about.