Volkswagen's parade of blunders might be coming to an end. If so, it has a chance of almost regaining its former glory.
Let us remember that the original Volkswagen Beetle was the first import car to take the North American market by storm.
At the end of the 1960s, the company was selling more than half a million cars a year in the United States and another 40,000 in Canada. Then came Toyota and Honda and, by 1993, VW was down to fewer than 50,000 sold in the United States and facing a real possibility of being forced to exit the North American market.
The Beetle's replacement in 1974 was the first-generation Golf, which was called the Rabbit for some bizarre reason in North America. It couldn't stop the Japanese juggernaut and VW wandered in the wilderness for years - opening and closing a big factory with big quality problems in Pennsylvania, failing to sell a big 12-cylinder $100,000 Volkswagen called the Phaeton and more recently failing to sell a Chrysler minivan with a VW badge on the front called the Routan.
And, oh yes, after the Golf brand was well-established in North America - and while the Golf remained year after year the best-selling car in Europe and while winning the World Car of the Year - the marketing geniuses in the United States decided to go back to the stupid Rabbit name.
John White, a Montrealer with lots of automotive experience in both Canada and the United States, is trying to restore order at Volkswagen of Canada.
Vaughan: I thought Volkswagen's best year ever in Canada was 1968, but I was wrong.
White: Our best year was 2001, when we sold 43,300 in Canada.
But the 1960s were great - we sold 40,400 in 1968 but then it dropped way off. It took a long time to get back.
And the Golf, or whatever you call it, is the foundation.
It's the No. 1 car in Europe every year, but the Golf was never in the United States what it is in Europe.
The hatchback market in the United States is not much.
Did you have a vote on renaming it the Rabbit? If so, I hope you voted no.
Well, at the time, the ad agency we were doing business with in the United States thought it would be a good idea to go back to the heritage of when the car was launched as Rabbit.
At the time, we were using the same ad agency in Canada. Though the Golf was a more entrenched name in Canada, we were using a lot of the same marketing material as the United States. We made the only decision we could at the time, which was to go to Rabbit.
Now what's happened is that we have our own standalone agency in Canada and we made a decision to go with the Golf.
Now I understand that the Americans are going to go back to the Golf name, too.
But you're still showing Rabbits on your website.
We still have Rabbits on our website.
We have about a month's inventory and then we're out of Rabbits - that's correct.
So did you did vote against the Rabbit name?
At the time our preference would have been to stay with Golf, but for all the practical and pragmatic reasons, we went with Rabbit.
The U.S. dog wags the tail.
Yes, but less so now.
We're a more independent organization. We report directly into Germany now so our reporting line to the U.S. is cut.
We've built up our Canadian organization here. But, at the end of the day, to get some projects to work, they have to be looked at in the North American context.
That's a fact of life. Sometimes you need the volume to be able to justify certain initiatives.
And that would include the Polo. That, of course, is the subcompact, smaller than the Golf, that has been sold for years in Europe but never over here. I saw the latest one in Geneva and it looks great. It's probably just what you need because Ford is coming with the Fiesta subcompact and Mazda is coming with the Mazda2.
We recognize that there's a need for Polo in our market perhaps more than in the United States and you should expect to see it in our lineup in the not-too-distant future.
That whole subcompact segment is growing. We think it's going to be about 125,000 to 135,000 in Canada.
It's also going to be a very crowded segment, but I recognize we've got to be in that segment to get to the volume.
Ford Fiesta's coming in 2010. Will you have the Polo then?
You've been back from the States for a while now. How have things changed?
You can call Canada a market with European tastes with U.S. legislation and U.S. competition.
Canada is becoming a more and more expensive place to do business.
The expense of incentives?
The incentive game up here is now catching up to the United States.
It was only a couple of months ago that I agreed to the zero-per-cent financing. We've never done that before at Volkswagen of Canada. I swore we were not going into the cash-back business.
But you can see certain trends in Canada now and even the Toyotas and Hondas of the world are doing that.
We're a very expensive market to do business in right now.
Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Fridays at 8 p.m. on Business News Network and Saturdays at 2 p.m. on CTV.