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