Jun 11 2014, 11:46am CDT | by Forbes
A casual glance at Volkswagen’s U.S. sales over the past two years would suggest the automaker is in trouble. As the new car market has recovered, with sales up 8 percent in 2013 and 5 percent so far in 2014, Volkswagen’s sales have fallen (7 percent in 2013 and 11.5 percent so far in 2014). While those numbers are telling, they don’t tell the whole story.
Volkswagen has spent the last few years redefining its global production system across the entire Volkswagen Automotive Group (or Volkswagen AG). That means not just the Volkswagen brand, but also Audi, Bentley, Bugatti, Lamborghini Porsche and the automaker’s brands sold outside the U.S. (MAN, Scania, Seat and Skoda).
Speaking of outside the U.S., total Volkswagen brand sales were up 3.4 percent globally in 2013 and are up 4.4 percent so far in 2014. Much of that growth is in the world’s largest car market, China, where VW brand sales are up 18.6 percent. In fact, for the first time ever, VW delivered one million cars in 5 months in China alone. Does that sound like a brand in trouble?
The fact is that Volkswagen is playing the long game here. It knows a coordinated and flexible global production plan is critical to its long-term growth and profitability, and a key part of that plan comes from creating a comprehensive platform system. The basis of this platform system is called the “modular toolkit” family because it starts with just four platforms (NSF, MQB, MLB, MSB) yet it has the flexibility to produce vehicles of nearly any size and configuration.
That means everything from the tiny Volkswagen Up! (not sold in the U.S.) to the stately Bentley Continental, as well as dozens of models across the Audi, Bugatti, Lamborghini and Porsche lines, can spring from just these four platforms. The flexible, “modular” aspect of the modular toolkit family requires only a few key hard points of each platform to remain consistent while allowing for major variations in vehicle height, length and overall body shape. As Volkswagen has worked to put this system in place it’s been forced to let much of its existing U.S. model line to grow a bit long in the tooth. But the new vehicles based on the modular toolkit are finally starting to arrive in showrooms.
The 2015 Volkswagen Golf Mark VII is one of the first U.S. models to utilize the MQB platform from the modular toolkit (the all-new 2015 Audi A3 is the other one). As you might guess, the key reason for using a streamlined platform system is to save production costs while, hopefully, engineering vehicles that are fully competitive in today’s ultra-competitive car market. Both the Audi A3 and the new Golf appear to validate Volkswagen’s plan.
This new Golf is larger inside and offers a stronger frame, yet it weighs less. It makes more horsepower in both gasoline and diesel form, yet it’s more fuel efficient. And every model comes standard with an advanced XDS Cross Differential system that enhances steering response and overall stability. Best of all, the new Golf costs less than the outgoing model despite all of these improvements.
The base 2015 Golf TSI “Launch Edition” comes standard with a new turbocharged 1.8-liter TSI engine, 5.8-inch touchscreen, Bluetooth connectivity and iPod integration, yet it starts at $18,815, or exactly $2,000 less than the 2014 base model. The Golf TDI features an all-new 2.0-liter Clean Diesel engine that is rated at 31 mpg city and 42 mpg highway (35 mpg combined), but I got almost 50 mpg when I drove a TDI recently. And yet, the diesel’s starting price is $22,815, or over $3,000 lower than the outgoing diesel version. The high-end GTI performance model comes with a turbocharged 2.0-liter, 210 horsepower (258 lb-ft) engine, LED fog lights, a rear spoiler and a sport mode driving selector for a starting price of $25,815 ($1,100 less than the 2014 model).
As someone who has driven every version of the new Golf I can verify the car is considerably better than the outgoing model. Horsepower and handling are as improved in the real-world as the upgraded specifications suggest. The interior control layout and cabin space have taken a leap forward, offering plenty of room for my family of four (with luggage) on a recent weekend getaway.
A better car at a lower price almost always ends in the same result: improved sales. Add in the reduced costs related to Volkswagen’s new modular toolkit system, and the improved sales should also mean increased profits, which is what Volkswagen really needs now, at least in the U.S. market (remember, it’s doing fine in China). This company-wide global platform revamp has been in the making for years, and only now are we seeing the fruits of Volkswagen’s labor in the form of the new Golf and Audi A3. More all-new models, with improved engineering and lower production costs, are in the pipeline across every Volkswagen AG brand. The automaker’s new midsize and compact SUVs, for instance, can’t get here soon enough.
So don’t get too hung up on Volkswagen’s current U.S. sales numbers. It’s global performance is a more accurate representation of how things are going. And as the 2015 Golf confirms, Volkswagen’s future in the U.S. looks bright.
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