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VW Canada plans to survive market ''shakeout'' with new models

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Alex Law
With a lot of new VW vehicles on the way in the next two years, the head of the German firm's operations in Canada makes some remarkably modest sales projections, particularly when you consider the flamboyant forecasts for growth -- 50, 100, 200 percent -- put forward by most of his colleagues.

Volkswagen Canada VP of operations John White (photo: VW of America)
John White says he'd like to see the VW arm of VW Canada move about 35,000 this year, with maybe 40,000 per annum likely by 2010.

But White has an advantage over most auto company execs -- he can do simple math, and he understands that there are too many vehicles going after larger pieces of a pie that's not going to get any bigger. To give you some idea of the situation, the sales projections for Canada's auto firms to the end of the decade work out to 2.3-2.4 million vehicles a year, rather than the 1.6-1.7 million total that's likely.

''It's competitive now and will get worse,'' says White of the Canadian new car market. ''It's going to cause some sort of shakeout. Not everyone's going to survive, but I like to think we're one of the ones that will.''

In pursuit of this sensible goal of simple survival, White intends to use a method that is quite popular across the industry -- good product delivering a good value. He differs somewhat from his colleagues in that he doesn't have any plans to add various new models to his product mix, though that might change before this decade closes.

For now, White is banking on the arrival of the new Jetta with the new 2.5-litre gas-powered inline-four and the TDI to start things rolling. After that there'll be the 2-litre engine in September and the performance-oriented GLI next spring,

The new Passat with the 2-litre engine will debut on August 15, followed by the V=6 version in October, and the Passat wagon in February.

A revised New Beetle coupe and convertible will also be here this September, sporting a new engine.
The revised Golf and its GTI sibling will arrive in June of 2006. (photo: VW of America)
, followed by another model he can't say anything about.

There will likely be other new models to follow, White allows, but ''These are the confirmed products that I can talk about.''

That leaves only Touareg due for an upgrade, and that will come in 2007. The big-ticket, low-volume Phaeton will be left alone to serve as technology showcase, and White doesn't think it will sell as well in 2005 as it did in 2004, when aggressive marketing moved 93 units.

White agrees with his Detroit-based boss, Len Hunt, on the subject for a car that's smaller and less expensive than the Jetta or Golf, since that segment is by far the largest in Canada. But VW has considered the obvious contenders for that slot -- the Polo and Fox models -- and rejected them as being unsuitable for North American tastes.

''We'd like a smaller car for Canada,'' White says, ''but the challenge is to find the right car at the right price that meets all of the regulatory levels.''

Overall, says White, ''If I had a wish list, a small car, a small SUV and a small van is where we'd go.''
Alex Law
Alex Law
Automotive expert