Here’s Why Volkswagen Is Last Year’s Biggest Loser

Illustration for article titled Here’s Why Volkswagen Is Last Year’s Biggest Loser

Well, ladies and gentlemen, the year is over. The holidays are behind us, the decorations are coming down, the eggnog has been consumed. And that means there's only one thing left to do: make fun of Volkswagen's sales figures.


To carry out this task, I like to play a little game called: How badly did Subaru beat Volkswagen this year? I started playing this game last year, when Volkswagen – an enormous, powerful, multi-national conglomerate who creates new sales targets by adding zeroes to previous ones – delivered fewer cars than Subaru, who primarily sells vehicles to people from Vermont who wear flip-flops in the snow.

But while Subaru did top Volkswagen in 2013, the victory wasn't that impressive: Subaru sold 424,000 cars in 2013, while Volkswagen managed 407,000 sales – a difference of just 17,000 units, or 4 percent. In the automotive world, that's nothing. It's peanuts; it's inconsequential; it's a footnote for automotive record-keeping historians. It's a phone call from Enterprise to Chrysler asking for some extra minivans.

But this year? This year was a rout.

To prove my point, I present to you the 2014 automotive sales figures for Volkswagen and Subaru. Last year, Volkswagen sold 366,970 vehicles – a decline of 10 percent compared to its 2013 numbers. And in the same span of time, Subaru delivered 513,693 vehicles. In other words: this is no longer a footnote. Subaru sold 40 percent more vehicles than Volkswagen. Subaru didn't beat out Volkswagen by a few units, or a few percent, or a few extra fleet sales. Subaru outsold Volkswagen… by Cadillac.

Now, for those of you who haven't been keeping close track, this might not seem so crazy. "I see Subarus all the TIME while I'm driving down the highway," you might think. "And I see Volkswagens too! They're the ones stopped on the shoulder with their hazard lights on!" So you might be wondering exactly why it's surprising that a big company like Subaru would outsell a big company like Volkswagen.

But the simple truth is this: compared to Volkswagen, Subaru is a tiny shell of a car company. Subaru has only three major product lines: you have the Impreza line, which includes the XV Crosstrek, which is only purchased by people in Colorado after they've smoked a bowl. You have the Legacy line, which includes the Outback, which people in Oregon think is an SUV. And you have the Forester, which is a legitimate compact crossover that can be enjoyed without marijuana or Oregon residency. Of course, there's also the BRZ, and probably a few dozen leftover Tribecas, but these are largely inconsequential to the total figure.


Meanwhile, over at Volkswagen, you have eight different product lines. There are two SUVs: the Tiguan and the Touareg. There's the Beetle, which is offered as a hardtop or a convertible. There's the convertible-only Eos, and the sedan-only CC. There's the midsize sedan Passat, the sedan or wagon Jetta, and the Golf, which now includes 3-door, 5-door, GTI, R, and electric varieties. And despite all these models, fourteen total if you go on Volkswagen's website and count all the body styles and variants, Volkswagen was beaten out by a brand whose primary selling point – all-wheel drive – doesn't even apply to half the country.

Now, all of this wouldn't be so bad if it wasn't for Volkswagen's own hubris when stating its aggressive sales goals. Just a few short years ago, the automaker told everyone – the Wall Street Journal, the New York Times, random schoolchildren walking down the street in Wolfsburg – that it would sell 800,000 cars in the United States by 2018. And in 2012 it looked possible: the Volkswagen brand hit 438,000 units that year, up 35 percent compared to 2011. Audi was at 139,000, up 19 percent year-over-year. They weren't so far away!


So, you might be wondering. What the hell happened?

And you ask a good question. In fact, if someone were to write a book about Volkswagen's efforts over the last decade, I think a good title would be: "So, What the Hell Happened? The Volkswagen Story." And it would be especially popular with Volkswagen executives, because I'm not entirely sure they know the answer themselves.


Fortunately, to help explain Volkswagen's issues, they have me: a self-described automotive expert in the sense that a) I own a car, and b) I sold two cars in 2014, which makes me approximately as successful as the Routan.

So, Volkswagen problem number one: this brand still does not make a credible midsize sport-utility vehicle. Folks, I don't know how to stress this enough. The Ford Explorer, which is widely regarded as the first hugely successful "family car" SUV, debuted for the 1991 model year. It came out twenty-five years ago. Next year, the very first Explorers will be eligible for collector vehicle plates. And despite the Explorer's popularity, and the ensuing rise of the SUV, and rivals from every brand between Mitsubishi and Hyundai, Volkswagen is still taking a "wait-and-see" approach to this segment. You have to wonder if the Germans are holed up in an office in Wolfsburg, staring out the window, dark suits on, telling each other that "really, the midsize SUV is just a passing fad."


Admittedly, Volkswagen has attempted to build a midsize SUV: the Touareg, which came out in 2004 after Volkswagen had completed an exhaustive 74 miles of road testing. But at its current price point, the Touareg slots between the Lexus RX and the BMW X5. The result: it's too expensive to sell in the kind of volume Volkswagen needs in order to rival Ford, Chevrolet, Honda, Toyota, Mitsubishi, Suzuki, Elio, Jim Bob's Used Cars and Bail Bonds, etc.

Fortunately, there's a little bright spot here: it's rumored that Volkswagen will finally be revealing a reasonably-priced medium-sized crossover next week at the Detroit Auto Show. Given that this vehicle is surely 25 years in development, I expect that it will offer powered flight and teleportation, or at least working Bluetooth. I think we can all agree the chances of this are slim.


Volkswagen problem number two: an absurd, inexplicable, razor-sharp focus on products that virtually no one wants to purchase, lease, finance, drive, or look at. Here I am referring to the Eos, the CC, and the Beetle, all of which are excellent vehicles – but excellent niche vehicles that simply distract Volkswagen from the ultimate goal of global domination-style sales volume. Newsflash, Volkswagen: you aren't going to sell 800,000 units with a hardtop convertible and a hatchback that's shaped like a protractor.

Consider this: in the time Volkswagen could've been developing a crossover that everyone wants, they instead created two different versions of the Beetle, a minivan twin with Chrysler, a swoopy 4-seater midsize sedan, a luxury car with oscillating air vents ("No, Hans, don't worry about creating a three-row Toyota Highlander rival. Just make ze vents move."), and a convertible whose power top appears to include more moving parts than Mongolia.


In other words: the brand has distracted itself from its own sales goals by building niche products that sell in small numbers. Worse, they've priced these things at stratospheric levels, sending even the niche shoppers directly to the used market. For proof, consider this: a base-level Volkswagen Eos starts at $36,500 with shipping, making it only eight grand cheaper than a 5-Series. A 5-Series! Of course, a base-level Eos far more expensive than a base-level 3-Series.

So Volkswagen has some issues, and it's easy to see why their sales numbers are off. And as we look back on 2014, we'll remember this as the year that Volkswagen ceded its plan for global domination to a bunch of people from Vermont who wear flip-flops in the snow.


Photo: AP

@DougDeMuro is the author of Plays With Cars. He owned an E63 AMG wagon and once tried to evade police at the Tail of the Dragon using a pontoon boat. (It didn't work.) He worked as a manager for Porsche Cars North America before quitting to become a writer, largely because it meant he no longer had to wear pants. Also, he wrote this entire bio himself in the third person.



Wow, so much US-centrism in one post. Congrats on that.

Newsflash: most of planet earth isn't the US.

In case you haven't noticed, and I bet on that, there is no volume manufacturer that does well in the US and Europe. Of course, luxury makers can do well on a global scale (if they're from Germany). Volume manufacturers can't. The qualities of a VW are only appreciated in Europe, while the 'qualities' of volume cars appreciated in the US (big, big cup holders, cheap) aren't appreciated in Europe. VW isn't doing to bad in China, either.