Quietly, methodically, and with careful planning skills as rich and deep as any car company could hope for, the Volkswagen Group is poised to become the world’s biggest car company. That would mean annual sales of more than 10 million globally and by extension at least 100,000 in Canada by 2018, if not sooner.
VW has become a force, but with very little fanfare. Perhaps that’s because the brightest minds at VW know that the best plans can be undone by events out of the planner’s control. And all is not perfect in the VW world, either, despite steady growth, healthy overall profits and some very interesting product in the pipeline. Remember, VW is based in Europe, the economic basket case.
Here in Canada, VW remains the mainstream diesel company and it’s a huge, huge strength at a time when buyers want fuel economy without sacrificing power. VW’s diesel advantage is a big reason why sales in Canada were up 6.0 per cent in July. If current trends continue, VW Canada will end 2013 with another record year for sales.
VW’s story, of course, is a product story. VW Canada has a diesel option on six different models. The bread-and-butter Jetta, which accounted for nearly half of VW Canada’s sales last month, is priced right (starting around $15,000) and is sold with three different gasoline engines, a diesel and a turbocharged hybrid.
“Once again, it is a matter of having the right product at the right price,” said new VW Canada boss Maria Stenstrom recently.
VW’s diesel advantage will remain largely unchallenged by other mainstream manufacturers for the foreseeable future. Yes, Chevrolet is bringing a Cruze diesel compact to showrooms in Canada and late this year Mazda will start selling a Mazda6 midsize sedan with a diesel. But no car company can match the depth and breadth of VW diesels.
And VW plans to defend its diesel turf, too. At an industry conference in Michigan this week, VW revealed plans for a new 2.0-litre turbocharged diesel engine. It will be sold in both VW and Audi brand vehicles – the VW Golf, Jetta and Passat most likely, and the Audi A4 and perhaps even the Audi A3. According to Automotive News, the new engine will be rated at 150 hp – 10 more than the current engine – and have the same 236 pounds-feet of torque as the current motor.
VW thinks this product story also has a happy ending at the company’s bottom line. Because of different emissions regulations in Europe and North America, VW has been selling different diesels on both sides of the Atlantic. This is expensive. The new VW 2.0-litre diesel will be able to meet global emissions standards to reduce particulates, oxides of nitrogen and carbon dioxide. One diesel for the world.
VW’s product innovations don’t end at diesel, either. As Automotive News reports, VW has devised a new product development system that can produce hundreds of variations from the same basic chassis. The first new model to ride on the new chassis is the seventh-generation Golf coming to Canada next year. VW has been pioneering platform sharing because it must. The VW Group is comprised of 12 brands, from VW to Audi, from SEAT to Skoda to Porsche and Lamborghini and commercial vehicles, trucks and even Ducati motorcycles (recently bought by Audi, actually). Not all those brands are profitable and some, such as Spain-based SEAT, are a profit-sapping disaster.
So what might stop VW from becoming the world’s biggest car company by 2018?
“One stumbling block would be that the new technologies do not catch on with customers, for example, if the wide range of alternative drives were not accepted by drivers,” CEO Martin Winterkorn recently told Automotive New Europe, before adding, “I don’t believe that will happen. Plug-in hybrids are, in fact, examples of vehicles that can be driven electrically and conventionally and that combine efficiency and suitability for everyday use, especially with regard to range.”
Hybrids from VW? Still a novelty, but diesels? Take a look at how important diesels are to VW Canada. Below you’ll find the percentage of VW Canada diesel sales by model. Without oil burners, VW would not be poised to stand astride the automotive world.
- Jetta 25 per cent
- Golf 25 per cent
- Passat 50 per cent
- Golf Wagon 65 per cent
- Beetle 30 per cent
- Touareg 65 per cent
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