VW is responding to its problems in the U.S. market

John McCormick
Car Culture

The wishes and wants of U.S. car buyers are tough to figure out. Just ask Volkswagen. While other major global automakers — GM and Toyota for example — have been running into trouble due mainly to quality issues, VW's problem centers on creating cars and trucks that really meet the needs of American consumers.

Several decades ago VW did well in the U.S. as buyers warmed to the brand's perceived German quality and quirky model characteristics. But fierce competition from other import brands, notably Korean makes, Hyundai and Kia, in recent years, has undermined VW's market share.

Most importantly, VW failed to adapt its mainstream global models to the particular needs of the U.S. market. The company also was slow to spot the emergence of the crossover vehicle, leaving its dealers starved for product in a hot market segment.

Bright spots remain, however. VW has carved out a commanding position in the U.S. diesel car market; the company's various TDI models account for 60 percent of diesel passenger car sales in North America. Sales of the all-new Golf and its sporty variant, the Golf GTi, are off to a good start and a refreshed version of the company's bread and butter Jetta sedan is hitting the market.

In terms of management and investment, VW has also upped its game. Earlier this year, a new CEO, Michael Horn, took over the reins in the U.S. and promises to take care of issues vexing VW dealers, such as providing customer loaner vehicles.

"We may be coming late to the market but we are coming very strongly," says Horn, referring to the arrival of a seven-seat crossover vehicle in late 2016.

VW of America's savvy marketing boss, Vinay Shahani, adds that the company's advertising will focus more on its cars as part of an effort to help dealers, plus a new consumer website that helps match buyers with specific cars, rather than being a "glorified sale brochure like most car company websites."

An investment by VW of $4 billion in U.S. infrastructure, including a manufacturing plant in Chattanooga, Tennessee, since 2008, will be followed by a further $7 billion over the next four years. Part of the new investment will go toward establishing a research and development facility by the Chattanooga factory, with the purpose of understanding the detailed desires of American car buyers.

Ultimately the move will give VW of America greater autonomy from the parent company and allow for shorter product cycles.

In the meantime, consumers visiting VW showrooms will find several attractive new or updated models. The popular Jetta is refreshed for 2015 with new front and rear styling, extra driver safety aids — including blind spot monitor, rear cross-traffic alert, and forward collision warning — plus better fuel economy.

For sporty drivers, the Golf GTi, the latest edition of the original "hot hatchback," is the car of choice, with its winning combination of performance and practicality.

But possibly the most interesting newcomer to the VW lineup is the 2015 e-Golf, the company's first fully electric car in the U.S. Starting at $35,445, the well-equipped e-Golf competes with rivals such as the Nissan Leaf and Chevrolet Volt. VW claims a range of 70-90 miles on a charge and a fast charging system allows an 80 percent charge in 30 minutes.

Unlike some electric cars, the e-Golf's battery pack does not compromise passenger or cargo space, preserving the Golf's highly practical design. What's more, the e-Golf is quick off the line and unusually fun to drive for an electric car.

It's clear that VW has finally recognized its problems in the U.S. market and is responding fast. The question is whether consumers will keep their faith in the brand while the turn-around progresses.

John McCormick is a columnist for Autos Consumer and can be reached at jmccor@aol.com.