| Volkswagen began introducing an array of | | | | American lineup, and it is also |
| new models after Bernd Pischetsrieder | | | | competitively pricing its Rabbit, with a |
| became CEO in 2002. The current | | | | base model starting below the average |
| Volkswagen Golf was launched in late | | | | cost of a new automobile. Volkswagen's |
| 2004, came runner-up to the Fiat Panda | | | | relations with its unions and its |
| in the 2004 European Car of the Year, | | | | relationship with the government of the |
| and has so far spawned the new | | | | German state of Lower Saxony, which owns |
| generation SEAT Toledo, Skoda Octavia | | | | stock in VW, remain impediments to |
| and Audi A3 hatchback ranges as well as | | | | further progress. But under Wolfgang |
| a new mini-MPV, the Seat Altea. The | | | | Bernhard, the Volkswagen Group executive |
| fifth-generation Golf was introduced in | | | | in charge of the VW brand, the company |
| Europe in late 2003, and the GTI boasts | | | | has recently been a greater interest in |
| a 2.0 L Turbocharged direct injection | | | | the North American market rather than |
| engine. The fifth-generation Golf, now | | | | treating it as an opportunistic |
| with the Rabbit name once again, went on | | | | afterthought. As of October 2006, the |
| sale in the U.S. and Canada in June | | | | strategy seemed to be paying off, as |
| 2006. (The GTI version arrived in North | | | | VW's U.S. sales for the first ten months |
| America four months earlier.) Volkswagen | | | | of the year were up over the period from |
| of America decided that returning to the | | | | January to October 2005 by nearly 10 |
| Rabbit nameplate will help the Golf's | | | | percent. |
| sales in these two countries. The | | | | Volkswagen has offered a number of its |
| fifth-generation Jetta, and the | | | | vehicles with an advanced, light duty |
| performance version, the GLI, are also | | | | diesel engine known as the TDI (Turbo |
| available in the United States and | | | | Direct Injection). Whilst extremely |
| Canada. The sixth-genretaion Passat and | | | | popular in the European market, light |
| the fifth- generation Jetta both debuted | | | | duty diesels do not yet enjoy the same |
| in 2005, and VW was soon looking to | | | | wide acceptance in the American |
| expand its lineup further by bring back | | | | marketplace, despite increased fuel |
| the Scirocco by 2008. | | | | economy and performance comparable to |
| In North America, VW faces unexpected | | | | gasoline engines due to turbocharging. |
| challenge to maintain its relevance. | | | | According to the U.S. Environmental |
| After rising significantly between 1998 | | | | Protection Agency, four of the ten most |
| and 2001, though, VW's North American | | | | fuel efficient vehicles available for |
| sales began to fall sharply leading to a | | | | sale in the U.S. in 2004 were powered by |
| 2005 loss of roughly $1 billion (U.S.) | | | | Volkswagen diesel engines. They were a |
| for its operations in the U.S. and | | | | three-way tie for 8th (TDI Beetle, TDI |
| Canada. The reliability of the company's | | | | Golf, TDI Jetta) and ninth, the TDI |
| cars appears to bear some of the | | | | Jetta Wagon. Sales of light duty diesel |
| responsibility for this situation. By | | | | engine technology are increasing as |
| 2005, its models sat near the bottom of | | | | gasoline prices rise. Products such as |
| Consumer Reports relaibility ratings, | | | | the Toyota Prius might have highlighted |
| and J.D. Power and Associates ranked VW | | | | the economy of non-gasoline engines, but |
| 35th out of 37 bands in its initial | | | | in reality, a Volkswagen TDI engine is |
| quality survey. Attempts to enter a new | | | | often found to be more efficient than |
| market segment also compromised | | | | the Prius on the highway (although not |
| Volkswagen's standing in North America. | | | | so when driving in the city). In |
| In 2002, Volkswagen announced the debut | | | | addition, all VAG TDI diesel engines |
| of its Phaeton ("Fay-ton") luxury car, | | | | produced since 1996 can be driven on |
| which was critically acclaimed but not | | | | 100% biodiesel. For the 2007 model year, |
| well received in the marketplace. VW | | | | however, strict U.S. government |
| announced its discontinuance in the U.S. | | | | emissions regulations have forced VW to |
| market for the 2007 model year, mainly | | | | drop most diesels from their U.S. engine |
| due to the disappointing sales there and | | | | liuneup, but a new lineup of diesel |
| the need for major investments in the | | | | engines compatible to U.S. standards are |
| car's line of engines (W12 and V8) to | | | | due for 2008. |
| meet new emission requirements. Also, | | | | Volkswagen long resisted adding an SUV |
| Volkswagen has faced harsh criticism | | | | to its lineup, but it finally relented |
| that the Phaeton had used up money that | | | | with the introduction of the Touareg in |
| was better invested in their smaller | | | | the early 2000's. Though it gained |
| cars. | | | | respectable reviews, the Touraeg has |
| Volkswagen is still in a better position | | | | been a modest seller at best. Some |
| in North American market than it was in | | | | automotive anaylsts balme the Toureag's |
| the early nineties, when its U.S. sales | | | | absence of a third-row seat, a popular |
| plummeted to 49,533 units in 1993. (By | | | | item even among SUV buyers who do not |
| contrast, 224,195 cars were sold in the | | | | actually need a third-row seat. The |
| U.S. in 2005.) The company hopes to | | | | company remains committed to the SUV |
| remain competitive in the U.S. and | | | | market, though, and it plans to add a |
| Canada with several new models. The | | | | miniature SUV, based on its "Concept A" |
| fifth-generation GTI has generated | | | | concept vehicle, soon. On July 20, 2006, |
| interest among the VW faithful with its | | | | VW announced that the new vehicle would |
| "Make friends with your fast" and | | | | be called the Tiguan. One major irony of |
| "Unpimp My Ride" advertising campaigns. | | | | Volkswagen's current North American |
| And although its reliability remains to | | | | lineup is the absence of a minivan, |
| be determined, the GTI was named by | | | | considering that VW is credited for |
| Consumer Reports as the top sporty car | | | | inventing the minivan with its original |
| under $25,000. Even more encouraging was | | | | Transporter, but the firm is currently |
| Volkswagen's performance in the J.D. | | | | devloping just such a vehicle for the |
| Power and Associates 2006 Automotive | | | | U.S. and Canadian markets with |
| Performance, Execution and Layout | | | | DaimlerChrysler, with current plans to |
| (APEAL) Study. Volkswagen scored highest | | | | introduce it some time in 2008. The |
| among "nonluxury" brands, finishing | | | | Touran microvan remains a possibility |
| fourteenth overall with strong | | | | for the North American market should |
| performances by its new Jetta and Passat | | | | such a class of passenger vans become |
| models. | | | | lucrative on that continent. So far that |
| Volkswagen has also added the Eos, a | | | | has not happened, although the success |
| sport coupe with a convertible hardtop, | | | | of the Mazda5 is causing some automakers |
| to its U.S./Canadian lineup as well. The | | | | to consider introducing Euro-style vans |
| Rabbit, GTI, are also being made in | | | | such as the Touran into the American |
| Germany and the Eos in Portugal for the | | | | market. |
| North American market. These production | | | | One North American lineup change that |
| points are used instead of producing in | | | | may happen is a new entry-level model |
| the VW's Mexican factory in Puebla, | | | | for the North American lineup below the |
| where Golfs and Jettas (1993 to 1998) | | | | Rabbit, the likes of which Volkswagen |
| were produced and also replacing the | | | | has not sold in the U.S. or Canada since |
| Brazilian factory in Curitiba where | | | | 1993. A venture with DaimlerChrysler to |
| Golfs and GTIs were produced (1999 to | | | | produce such a vehicle was considered |
| 2006). | | | | but dropped as of September 2006. North |
| The fifth-generation Golf, sold in North | | | | American Volkswagen fans continue to |
| America as the Rabbit. | | | | hold out hope for the Polo, or at least |
| Volkswagen is counting on better | | | | a Polo-related vehicle from Latin |
| workmanship from its German plants to | | | | America, to be introduced here. |
| improve the reliability of its North | | | | |