Volkswagen Achieving Ambitious Sales Goals At Expense Of Profitability - Ford Inside News Community
 
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post #1 of 4 (permalink) Old 03-17-2014, 01:55 PM Thread Starter
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Volkswagen Achieving Ambitious Sales Goals At Expense Of Profitability

http://www.forbes.com/sites/neilwint...profitability/

Volkswagen investors must be wondering what is the point of a company which wants to be the biggest auto manufacturer in the world, but every time it sells an extra car it makes less money.

At a recent press conference in Berlin, CEO Martin Winterkorn said VW sales will hit 10 million this year, four years earlier than originally planned. The ambition also entails overtaking Toyota of Japan as world number one in terms of sales, and keeping General Motors GM +0.09% in 3rd place.

Volkswagen has an impressive record of boosting sales and grabbing market share. In Western Europe it is market leader with a share of close to 25 per cent. Volkswagen Group Volkswagen Group sales combine its own VW brand and fellow mass market contenders like Skoda and SEAT. There is also its luxury brand Audi Audi, upmarket sports cars and SUVs at Porsche, top of the range luxury at Bentley and Lamborghini, motorbikes and trucks. But investors are worrying because VW brand profits are stagnating and aren’t likely to gather pace any time soon.

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post #2 of 4 (permalink) Old 03-17-2014, 05:04 PM
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Re: Volkswagen Achieving Ambitious Sales Goals At Expense Of Profitability

It's odd that VW is doing so well throughout the world except for the U.S.
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post #3 of 4 (permalink) Old 03-17-2014, 05:10 PM
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Re: Volkswagen Achieving Ambitious Sales Goals At Expense Of Profitability

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Originally Posted by Dequindre View Post
It's odd that VW is doing so well throughout the world except for the U.S.
VW is VW's mainstream brand in NA yet they tend to be priced as though they are a entry level premium brand. Combine that with the notorious reputation for expensive service and not quite Toyota level vanilla design and what do they expect? The value proposition is decidedly not in VW's favor nor do the cars themselves generate any excitement.
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post #4 of 4 (permalink) Old 03-17-2014, 05:15 PM
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Re: Volkswagen Achieving Ambitious Sales Goals At Expense Of Profitability

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Originally Posted by SP1966 View Post
VW is VW's mainstream brand in NA yet they tend to be priced as though they are a entry level premium brand. Combine that with the notorious reputation for expensive service and not quite Toyota level vanilla design and what do they expect? The value proposition is decidedly not in VW's favor nor do the cars themselves generate any excitement.
I think Volkswagen's failure with the Jetta and Passat shows an excellent trend; Americans don't want boring cars anymore. We, as a country, used to be content with bland, weak compacts and mid-sizers. With the current round of expressive and quality sedans (like the Elantra, Fusion, Accord, Focus), I think people realized that compacts and mid-sizers can be functional AND look expressive at the same. The Passat and Jetta went the opposite way.
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