Profits Down for Europe's Largest Automaker Causing It's Stock to Drop
What's Europe's worst performing automaker? Well, when talking financial performance it is Italy's Fiat Group, not a tough one for any self respecting newshound to guess. But you might find it a little more difficult to name the manufacturer in the second least enviable position.
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| Volkswagen is currently sitting as Europe's second worst performing automaker with the bungled roll-out of its new-generation VW Golf. (Photo: Volkswagen Canada) |
Volkswagen, the brand that at one time seemed as if it could do no wrong, is suffering staggering losses after a bungled roll-out of its new-generation VW Golf, a product critical to the automaker's success.
After years of brand accumulation, that now sees VW AG holding its namesake Volkswagen division, Audi, Lamborghini, Bentley and Bugatti, as well as European nameplates Skoda and Seat, analysts are speculating that the automaker may have spread itself too thin.
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| From the "people's car" maker to a wanna-be luxury brand, Volkswagen is finding out the hard way that not many people are willing to pay in the neighborhood of $100,000 for a car with a VW on the hood and trunklid, no matter how good it is. (Photo: Volkswagen Canada) |
To add insult to injury, ex-CEO Ferdinand Piëch wasn't satisfied merely controlling the largest group of premium brands in the automotive sector, but instead found it necessary to develop the "people's car," Volkswagen, into a rival to compete head-on with the likes of BMW, Lexus, Mercedes-Benz and ironically, it's own Audi nameplate.
The new full-size Phaeton luxury sedan is as good as anything in its class, but disappointing sales in Europe and now in Canada, with only four units sold last month compared to Audi's 14 A8 sales, shows that not many luxury buyers are prepared to pay near and beyond $100,000 for a VW.