Volkswagen brand choked by cost and complexity

[HTSS_TR]

Quote:

A steering wheel may seem like a simple component for a car. But when you buy a Volkswagen Golf, you have a choice of 117 different steering wheels. VW is now planning to cut that number to 43 as the scandal-ridden German carmaker looks at ways of saving money and boosting profitability. Many of the variations were just for slightly different shades of grey or an extra button or two on the wheel, according to managers. VW was aware of its cost problem even before the diesel emissions scandal broke in September. Martin Winterkorn, its former chief executive, started an efficiency program that current managers say will now be intensified. Much of the work is about reducing complexity, as with the steering wheels. Endless examples abound. VW currently manufactures two different types of internal lighting — one for left-hand drive cars, one for right. In the future, it will make just one. The front seats in the Golf will have 259 variations in the future instead of 341.

http://www.ft.com/cms/s/0/e2afceba-8ec8-...us_yahoo/auddev Steering wheel and front seats should be less than 10-15 varieties.

 

[OneEyeJack]

It will be interesting to watch VW in the next couple of years. I wonder if things get worse, with their government bail them out?

 

[wemay]

I think they'll come of this alright... http://time.com/money/4114292/volkswagen-demand-low-inventory/

Quote:

Volkswagen may be battered in the stock market and court of public opinion, but they’re still selling cars. In fact, dealer inventory has been unable to keep up with the demand. Buoyed by incentives that have made owning a Volkswagen far more affordable, overall demand for the brand hasn’t been hurt by the diesel emissions scandal—October sales for gasoline-powered cars were actually flat year-over-year. According to Autonews, all these incentives have brought down prices to compete with Honda, Ford, and Nissan, something the dealers have always wanted.

 

[edwardh1]

I bet there is a special lube specified for the steering wheel, a German oem brand. I went through a Bosch plant in the US once all their cutting and milling machines used oil from Germany in 55 gallon drums, the freight must have really raised the price

 

[fdcg27]

VW has been offering their mainstream cars at lower prices for the past few years, so that the Passat is price-competitive with the Accord and Camry at actual retail. There are folks who would normally gravitate to one of these Japanese nameplates who are interested in trying something different. They might just drive a Passat home. VW's problem is in execution. If you're going to sell cars at competitive prices, you also have to achieve competitive build costs as well as competitive reliability and durability. VW is not known for either low construction costs or great reliability. If VW can achieve competitive costs and reliability, then I'd say that VW can do pretty well going forward. People may now swear that they'd never buy a VW, but people have very short memories.

 

[CT8]

Originally Posted By: OneEyeJack

It will be interesting to watch VW in the next couple of years. I wonder if things get worse, with their government bail them out?

Probably which ever they lobby most will bail them out.

 

[HerrStig]

There are plenty of posers who'll buy a cheap German car and then whine that it isn't built like a Benz.

 

[fdcg27]

Originally Posted By: HerrStig

There are plenty of posers who'll buy a cheap German car and then whine that it isn't built like a Benz.

Most of today's Mercedes aren't built like a Benz either and many are pretty cheap.

 

[GiveMeAVowel]

Originally Posted By: fdcg27

Originally Posted By: HerrStig

There are plenty of posers who'll buy a cheap German car and then whine that it isn't built like a Benz.

Most of today's Mercedes aren't built like a Benz either and many are pretty cheap.

This is very true, the last of the truly solid bank vault like quality and durability of a Mercedes was back in the early 90s.

 

[fdcg27]

The 201s and 124s seemed pretty solid. We had a 201 and though pretty old when I bought it, it remained good looking in and out and was trouble free for the 34K that we drove it. It died protecting a son in an accident. Son was fine, 190E was crusher bait.

 

[Vikas]

Didn't old GM had similar problem i.e. too many variations?

 

[lubricatosaurus]

Complexity? Tell Ford. The Ford Focus has a choice of 5 different engines. 1.0L Ecoboost, 2.3L Ecoboost, 2.0L Ecoboost, 2.0L Direct Injection, and Electric Motor.

 

[Andrew1972]

Originally Posted By: lubricatosaurus

Complexity? Tell Ford. The Ford Focus has a choice of 5 different engines. 1.0L Ecoboost, 2.3L Ecoboost, 2.0L Ecoboost, 2.0L Direct Injection, and Electric Motor.

Ever some real successful mass makers in the USA like Honda(4ish motors) and Subaru(3 motors) have very few motor choices and furthermore do not offer individual options just packages. I think options thought are wonderful for the upper luxury end where pure profit on top of profit like MB and Porsche.

 

[KrisZ]

WOW! People complaining about choices. How about going for one or two car manufacturers total? That should make the choices much easier, no?

 

[Quattro Pete]

There is a difference between choices in the US (or any one country for that matter) and choices world wide. For example, a Golf in the US may only be available with a few different options for front seats, but multiply that by 100 countries (or however many they directly sell in), and all of a sudden you have hundreds of combinations. I would imagine some fabrics/colors/materials are more popular in one country vs another. That's part of what makes markets different. So, even if you try to box your customers into a handful of options, like is typically the case with German cars in the US (to achieve larger economies of scale and hence lower price to the consumer), you still may end up with hundreds of options globally, if you want to be successful in each country.

 

[Kiwi_ME]

Originally Posted By: Quattro Pete

.. For example, a Golf in the US may only be available with a few different options for front seats, but multiply that by 100 countries (or however many they directly sell in), and all of a sudden you have hundreds of combinations. I would imagine some fabrics/colors/materials are more popular in one country vs another. That's part of what makes markets different.

I don't think our Golfs are any different than those in Australia, UK or Germany ... interior trim wise. Our importer won't have the buying power. However we can still buy a base-spec Golf with a manual transmission off the lot.

 

[lubricatosaurus]

Originally Posted By: KrisZ

WOW! People complaining about choices. How about going for one or two car manufacturers total? That should make the choices much easier, no?

Sure its fun & cool for the consumer, but it is a complicated mess to run a business that way. No complaints. Just looking at profitability strategies.

 

[BMWTurboDzl]

These are largely cosmetic differences. IMO the problem is that German engineers generally have a better appreciation for complexity over simplicity. IMO the problem with this approach is that the quality of parts suffer for it.

 

[lubricatosaurus]

Its really clear evidence of the highly competitive nature of the world car market when there are choices out the wazoo. The consumer really rules. I just shopped for a couple of cars, and it was overwhelming the number of things I could do. (And then there's TrueCar.com, edmunds, kbb, autotrader, cars.com, etc. to make you spend another year trying to figure out the best deal.)

 

[artificialist]

This makes me think about when I got my 2002 Jetta 1.8T 180HP At first, I thought I was going to get a 12V VR6, but suddenly the 180HP 1.8T appeared and it was cheaper. Just a few months later, they introduced a 24V VR6. The other weird thing was that the 12V VR6 had a 4-speed automatic, then the 1.8T had a completely different 5-speed auto, then the 24V got some other transmission. This also makes me think about the 1998 Beetle and Cabrio. Some parks were from MKIII Jettas and other parts were from MKIV Jettas. The MKIV Jetta was introduced as a "1999.5" Jetta, which sounds kind of weird. I will be buying a Winnebago Rialta when I finally get my legal settlement, and I found something weird as well. The 2001 got a 24V VR6, but sometime partway through 2002, it used a 12V VR6 water pump. Eventually it got the same water pump as the 24V VR6 found in the Jetta/GTI. Other cars had a variety of parts that were redesigned halfway through the model year, but I tend to think of VW and Ford.