> Deliberately and cynically scamming millions of their customers could have something to do with VW's loss of brand value.
It definitely has. But the current issues seem to be more due to a number of other factors.
During the pandemic, pretty much every German car manufacturer tried to more or less get rid of their lower priced models and focus on the high end market to increase margins. As far as I know, this was largely driven by supply chain issues and shortages making lower priced models financially less attractive for the car manufacturers. VW is not a luxury brand so they suffered from this more than other German manufacturers. With inflation and recent world market developments (the Chinese levelling up their car manufacturing), this situation has only got worse.
But the most important factor may yet be electrification. VW doesn't have an edge in electric cars and their product lines (the ID3, 4 etc.) are not really competitive. They also failed to vertically integrate. German car manufacturing still is largely a supply chain coordination game, making it hard to innovate quickly.
Last but not least, I guess the current insane energy policies and quite literally cooling economic environment in Germany don't really help as well.
VW used to be the cheap option for the masses, hence the name "Volkswagen" = "people car". They could then successfully push out competitors by gradually raising quality and prices. But by now, VW is one of the most premium brands in Germany. So their usual "raise quality and prices" strategy has stopped working.
My parents' generation loved their VW Golf, which back then was a cheap car for students. But nowadays, a new VW Gold can cost €44000 which is completely out of reach for most students and young adults. Similarly, they used to have ads mocking the fact that a VW Transporter was an extremely popular family car used for vacations and camping trips. At €90000 for a Volkswagen Transporter (version 7), it's now become more of a status symbol or collector's item.
Actual families will buy a €8000 Dacia transporter. And in line with Christensen's talk, it looks like Dacia is now scaling up quality and raising prices, thereby pushing VW out of the budget market into the much smaller premium segment.
But the most important factor may yet be electrification. VW doesn't have an edge in electric cars and their product lines (the ID3, 4 etc.) are not really competitive.
They must be doing something right because the ID.4 sells like hotcakes in Scandinavia, Germany and other European countries. It was the #1 EV in 2022 in Sweden, and #2 in Germany behind the Tesla Model Y. (ID.3 was #3)
I guess I should have phrased it differently. Going forward, they don't seem competitive in comparison to Tesla and the upcoming Chinese competition.
Selling a lot of cars doesn't mean it's a profitable business.
I am quite sure the German government will come up with new tariffs, subsidies and regulations to make it look as if they can continue to dominate the local market though, hurting consumers and the German industry even more along the way.
Politics was, luckily for VW, very successful at massively delaying Vinfast's market entry with regulations. Otherwise, that electrical 5-seat SUV for only €17600 would have been a massive problem for German car companies. It's like 70% cheaper than an ID.4 and people will probably accept a lot of small hiccups for that amount of money saved.
The state and VW are quite intertwined, so I guess our politicians will not stop before they have driven this whole thing into the ground completely.
Ultimately, I believe this will be a good thing for Germany in the long run. But for quite some while, this will cause substantial pain to a lot of German citizens.
I guess I should have phrased it differently. Going forward, they don't seem competitive in comparison to Tesla and the upcoming Chinese competition.
Phrased that way I would generally agree with you. I think not only European, Japanese and Korean brands but Tesla too is in for a bit of a rude awakening once all the Chinese stuff really hits Europe.
Germany is not the US. We are not energy independent. In fact, we are not independent of anything other then water maybe.
Germany is reliant on exports. Tariffs are not helpful there. If you can’t manufacture a product at competitive prices on the world market, Germany has no real business in manufacturing anything anymore unless in a war economy.
As a leading economy in the EU you might have the means to stretch that out for some time, but ultimately this makes matters worse in the end.
Germany is currently trying to subsidize what remains of the industry at the cost of consumers. This is already causing substantial backlash from consumers, voters and even the federal courts. Good luck with all of that.
Compared to internal-combustion cars, electric cars are much more of a commodity, specifically, the hardware is a commodity. In the the long run, this will hurt manufacturers in high-cost countries.
I would hope that the largest car company in Europe still outsells others in their home countries. They are pushing everything they have into Europe where they still have the largest lead in Mindspace, Dealerships, Relations with Leasing partners etc. They also offer some cars at very extreme monthly payments and still they reduce production.
Tesla will make a lower cost model soon and a Model 3 will likely also come from Brandenburg soon, so right now VW competition is not even fully there yet.
I would hope that the largest car company in Europe still outsells others in their home countries. They are pushing everything they have into Europe where they still have the largest lead in Mindspace, Dealerships, Relations with Leasing partners etc.
This is not really surprising or bad strategy. VW has zero chance in China and America is a very underdeveloped market so focusing on Europe makes all the sense in the world. The question was whether they have competitive products right now and I find it really strange to say they don't when they have the #4 and #5 best selling EVs in all of Europe (not just Germany):
There are more very successful VAG products in there too, like the Audi eTron and the Skoda Enyaq. They might be unable to sustain this -- I don't know -- but right now, as a Swedish dude in Sweden, VW is very much looking like one of the winners judging by what cars I see on the road.
Also: any statement to the effect of "Tesla will release a new product soon" I will take with a mountain of salt, considering their track record.
> The question was whether they have competitive products right now and I find it really strange to say they don't when they have the #4 and #5 best selling EVs in all of Europe (not just Germany)
You can have high sales numbers and still not be competitive if you don't turn those sales into viable profits.
I think it's also important to distinguish between the VW brand and company. The article explicitly says:
> “With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand,” Thomas Schaefer told staff during a meeting at the German carmaker’s headquarters in Wolfsburg, Germany, according to a post on the company’s intranet site seen by Reuters.’
So there can be no doubt that the VW brand is in trouble with regards to competitiveness.
The company may still be doing "fine" due to high end brands still performing well.
You can have high sales numbers and still not be competitive if you don't turn those sales into viable profits.
I guess the confusion here is between the company being competitive -- as in making money -- and having products that are competitive in the marketplace -- as in consumers buy a lot of them and frequently pick them over other options. Slightly different meanings for the same word -- fair enough. I was thinking of this as a consumer/man-on-the-street looking at all the VWs, not as someone looking at quarterly earnings.
> I guess the confusion here is between the company being competitive -- as in making money -- and having products that are competitive in the marketplace
This is almost certainly going to boil down to being the same in the end.
If your company/brand is not competitive, you won't be able to sustain competitiveness in sales long term. Unless you are a rather novel growth company who are able to get enough investments to compensate for the non-existing profits.
VW has a special place, because it's intertwined with the state and German politicians will do anything to make it look as if they are still doing okay and have a bright future.
> Last but not least, I guess the current insane energy policies and quite literally cooling economic environment in Germany don't really help as well.
Who would have thought that pilling up incompetent energy policies one after an other would come back to bite them.. And if only the energy policies where the only bad choices they were making..
They used to make affordable cars like their nameplate implied (People's Cars) but these days you have to go Japanese, Korean, Chinese of heaven forbid French if you want anything affordable.
There is no city cars in their lineup - the Polo is now looks like and priced like a Golf from a few years back and the Up got canned.
I had two VWs in my life that I truly loved till they had driven 50k miles: A 1980 Rabbit Convertible and a 2000 New Beetle. The styling and handling, but not the quality. After each purchase, I swore I would never buy another. I want to love and own a VW again, but only when the quality is as good as a Lexus, Toyota, or Hyundai.
I hate them for that.
It's winter time now, so I have my car heater blower on all the time. Whenever I start smelling diesel in my car, a TDI engine is in front of me.
Please get an active carbon filter for your air inlet. They’re not expensive and most cars only have the pollen filter version.
We found very high pollution values inside cars which in hindsight is very much not surprising due to what you noticed. A carbon filter brings it way down.
Trusting companies to do the right thing has always been humanities most shameful indulgence.
Having been lied to 20 times in a row and still trusting the 21st time is a sign of other problems. It is a good indicator of a populations submissiveness. Admitting to oneself that one has made a mistake investing a lot of money in a product, takes some guts most people don't seem to have. Same as admitting your oh-so-democratic government has obviously been corrupted by the same corporate elements.
The issue is admitting this leads to admitting one was a coward for tolerating it. That's why people double down on the most idiotic positions. I've seen flat earthers and corona deniers do it same as dieselgate apologists.
Unfortunately many of the top trading companies invest a lot of money into anti-regulation propaganda. It's the "trickle down economy" of the 21st century.
Nuking effectively everything except the Touareg, Tiguan, Atlas, Taos, Q7, Q8, and the entire Porsche lineup in the US has done them no favours. The Golf is dead, New Beetle is dead, Passat is dead, the A5 is being neglected, the A8 is just the previous generation with new styling in and out, the A3 still hasn't made it over here in enough numbers for dealers to actually sell them, the A4 is being neglected and hasn't gotten the Q7's upgrades, the Jetta's due to die, Arteon's due to die, and for a partner to the ID.4 the ID.2 hasn't even been launched in favour of slinging us the insultingly priced ID.buzz instead which dealers won't even take allocations for because they know a $60,000 (starting price, most trims hit $80,000) minivan that can't be used as a minivan won't sell. All of the discontinued models were slated to be sent behind the barn before the pandemic, so they can't even use that as an excuse. They tried to copy Ford's stupid move of dropping all sedans and hatchbacks save for the performance halo car and focusing on SUV and CUV sales, and they're seeing the same result of losing market share and being forced upmarket to cover the loss, squeezing margins.
Plus the financing plans where they're seemingly deciding to do almost the exact same thing Mitsubishi did in 2001 in offering 0% interest rates and no down payment to grab the Atlas and Taos because they want to eat into the market share that the Nissan Rogue and Kia Sorento have. Carlos Ghosn's stupidity in chasing volume via financing anyone who could breathe at shockingly low interest rates nearly destroyed Nissan and was the reason why he got ousted from both Renault and Nissan. Meanwhile the other manufacturers are seeing the dour consequences of abandoning the $30,000 and below segment and chasing the high end $70,000+ full size SUV customers, which is a tiny fraction of a market that's shrinking further because the upmarket push creates a feedback loop.
Volkswagen does not have the cheapness of Nissan and Kia to make up volume, and they don't have the perceived robustness of Toyota to build a base to move upmarket. They're stuck, and they're slinging Taos' and low financing out like candy hoping it will save them and bring back former Golf customers.
Been looking at under 30k entry level crossovers/suvs and the reliability reviews I see are pretty bad. Volkswagen Taos was given a 37 by consumer reports, their entry level crossover/suv seems to be ranked pretty low.
But they have great reviews for 2024 Taos and its under 30k, buts its new, so who really knows. So much new tech in 2024-2026 coming out, models are changing pretty heavily during refresh.
I was in the market a couple months ago (US). If you haven't given the 2023 Id.4 a look, you might consider it. They're practically giving them away right now due to surplus inventory. The lease deals are especially attractive. My monthly is about what I was quoted for a Honda Accord or a Prius.
Software is atrocious. Everything else, extremely happy. While everyone else queues up in an endless Costco line to save $10 off their $100 gas bill, I just relax and order sushi while my car chugs free Level 1 electricity outside.
Shedding the outdated burdens of unions and the dealership sales model is all that will save these dinosaurs and allow them to innovate at competitive prices.
Dump unions, automate far more, implement cutting edge materials and processes and technologies, dump the dealer mafia, and all will be well.
VW clearly has an ineffective and corrupt leadership which has way too much influence in German politics. And your solution is to... make the leadership less accountable?
Reality is a nightmare wherever that recipe was followed through, yet the solution is to demand more of the same monopoly mess. Ideology and insanity, the same Algo, different results, yadada Yada ya..
