Only last month, Volkswagen warned analysts that it didn't expect to achieve any profits in North America until 2007, due to low
revenues and extremely strong competition on new cars prices from General Motors, Ford, and Chrysler Group.
"It's a company in crisis," commented Bernhard. "People need to understand that. They have to change."
What the automaker failed to mention was that Volkswagen was also in crisis because it continues to lose market share to Japanese competition as well as domestic rivals, plus its confusing marketing message to consumers, targeting economical compact buyers on the one hand and wealthy super-sedan customers on the other, have caused some potential owners to believe that Volkswagen cars are too expensive, or for that matter not prestigious enough.
Some other automakers have tried to move up-market too quickly, with equal results. Chrysler, for instance, brought its
new Pacifica crossover SUV to market in one fully-loaded trim level for a price that was much more than most consumers were prepared to pay for a product from the "blue ribbon" brand. And its not that the vehicle itself didn't deserve to fetch its original $43,395 price point, as it offered elegant styling, excellent perceived quality, more luxury and convenience features for the dollar than any rivals at the time, and the list goes on, its just that the brand, which was selling Neons up until the previous year, wasn't prestigious enough - the 300C, and to some extent the Pacifica over time, have helped to improve Chrysler's image, but don't expect its brand managers to once again attempt to take it where it doesn't belong anytime soon.
 |
| Volkswagen recently warned analysts that it didn't expect to achieve any profits in North America until 2007, a problem that new models like the upcoming Eos convertible, introduced at the Frankfurt auto show earlier this week, could go a long way to eradicating. (Photo: Volkswagen Canada) |
"It's a company in crisis," commented Bernhard. "People need to understand that. They have to change."
What the automaker failed to mention was that Volkswagen was also in crisis because it continues to lose market share to Japanese competition as well as domestic rivals, plus its confusing marketing message to consumers, targeting economical compact buyers on the one hand and wealthy super-sedan customers on the other, have caused some potential owners to believe that Volkswagen cars are too expensive, or for that matter not prestigious enough.
Some other automakers have tried to move up-market too quickly, with equal results. Chrysler, for instance, brought its
 |
| Chrysler's Pacifica offered elegant styling, excellent perceived quality, plus more luxury and convenience features for the dollar than any rivals, but when it debuted its MSRP was still too high for its brand image, and sales suffered before a significant price drop. (Photo: Trevor Hofmann, Canadian Auto Press) |