VW Losses in North America

The Tuesday, 16 November 2005, Washington Post carried a WSJ article
about the withdrawal of the VW Phaeton from the US market.

But what really caught my attention was the statement that VW has lost
$960 million so far this year in the North American market.

That seems incredible to me, but it appears to be correct. How much
is that per vehicle? If VW is selling 15,000 vehicles per month, that
would be:
$960,000,000/(15,000*10) = $6,400 per vehicle !! Aargh!!

Even at $5,000 loss per vehicle ........

That's many times more than GM is losing per vehicle.

> But what really caught my attention was the statement that VW has lost
> $960 million so far this year in the North American market.
>
> That seems incredible to me, but it appears to be correct. How much
> is that per vehicle? If VW is selling 15,000 vehicles per month, that
> would be:
> $960,000,000/(15,000*10) = $6,400 per vehicle !! Aargh!!

I'd be curious to know what the definition of loss is, what's included
in that calculation, and what the mechanism is by which the money is lost.

That $6400 per vehicle, since it's a loss, is below their cost to
produce, not just below their suggested selling price. Their North
American plant is in Mexico, labor is cheap there -- they can't be
suffering the same kind of union-benefit losses that GM is. Are there
that many cars that simply go unsold? Do they just junk the ones that
are unsold, with no cost recovery at all? Are they spending that much
on recall and warranty repairs? Mystery to me.

Neither GM nor VW has much of a clue as to what the public really wants or
needs. That's why they are both in such serious financial trouble. If they
are wise, they will start paying attention to what Honda, Toyota, and other
future-minded companies are doing.

> Neither GM nor VW has much of a clue as to what the public really wants or
> needs. That's why they are both in such serious financial trouble. If they
> are wise, they will start paying attention to what Honda, Toyota, and other
> future-minded companies are doing.

Seems to me it's not a matter of being out of touch with what the public
wants -- at least not product offerings. After all, some of Honda's
newest products are out-and-out imitations of GM products (am I the only
one that thinks the Ridgeline is an Avalanche with Aztek styling?), and
Toyota has heavily skewed their product line towards SUVs, minivans and
trucks. I believe it's a quality problem. GM has never made
top-quality products, and they refuse even to try. VW seems oddly
indifferent to quality problems and warranty claims. I've had no
unusual problems with my VeeDubs over the years, but the horror stories
are out there, and well-known by the public -- meanwhile, VW does
nothing to improve its public image regarding those QC issues.

Brian Running wrote:

> one that thinks the Ridgeline is an Avalanche with Aztek styling?), and
> Toyota has heavily skewed their product line towards SUVs, minivans and

Maybe it is what the NA customer really wants?

> trucks. I believe it's a quality problem. GM has never made
> top-quality products, and they refuse even to try. VW seems oddly
> indifferent to quality problems and warranty claims. I've had no

There should be no financial losses then, as the sucessfuly denied
claim costs you no money at all You will just lose a customer, but
as VW produces (almost?) no cars in the USA, it can't make you lose
money, as your factory eats money elsewhere.

And the VWoA expenses alone can't be so high, even with warranty claim
expenses.

> unusual problems with my VeeDubs over the years, but the horror stories
> are out there, and well-known by the public -- meanwhile, VW does
> nothing to improve its public image regarding those QC issues.

Well, pick your favorite model and look at how much does it cost in NA
and how much in (for example) Europe. And don't forget to take into
account all the nice features, such as climate control, power windows,
alloys etc which usually cost a lot of additional money here in Europe.
I believe you know how to find the American prices, and the european
ones could be easily found under www.volkswagen.co.uk or
www.volkswagen.de with help of the car configurator.

I think this is the real reason, why VW loses so much money. As the
dollar went down, the prices of imported cars did not rocketed up.

>>one that thinks the Ridgeline is an Avalanche with Aztek styling?), and
>>Toyota has heavily skewed their product line towards SUVs, minivans and
>
>
> Maybe it is what the NA customer really wants?

I thought my point was obvious, apparently not. Yes, that is what the
North American customer wants, that is what GM produces, and Honda and
Toyota have followed GM's lead in doing so. Therefore, it's not
accurate to portray Honda and Toyota as meeting consumer desires but not
GM. See?

"Papa" > wrote in message
ink.net...
> Neither GM nor VW has much of a clue as to what the public really wants or
> needs. That's why they are both in such serious financial trouble. If they
> are wise, they will start paying attention to what Honda, Toyota, and
> other future-minded companies are doing.

What kills me is that NO ONE sells a small size, 4 door, 4 wheel drive,
diesel pickup. Good power, good gas mileage. If they could do that
at a good price I bet it would sell.

GM and Ford knows exactly whatt the public wants. But doesn't want us to
have it...Ford and GMs problem is trying to get rid of their 10s of billions
of pension liability and medical expenses for its retires , by filing for
bankruptcy. And that won't be approved while they are making money.. or
without showing a loss for a long time. Everything GM has done has been
planned to lose money without looking like they did it on purpose.. And has
taken years of slow ,consistant , planned losses. Crappy cars, rebates,
losing market share, abandoning great cheap cars , for crappy more
expensive ones. , or cheap crappier ones. These losses now ,... are much ,
much less then they have to gain. This is a very big picture plan. They're
following in the steps of the Steelworkers Union mostly, the Airlines, and
governments own examples. Make no mistake. This is business at its best..
Ruthless,..... business planning at its best.....
"Numan" > wrote in message
. net...
>
> "Papa" > wrote in message
> ink.net...
>> Neither GM nor VW has much of a clue as to what the public really wants
>> or needs. That's why they are both in such serious financial trouble. If
>> they are wise, they will start paying attention to what Honda, Toyota,
>> and other future-minded companies are doing.
>
> What kills me is that NO ONE sells a small size, 4 door, 4 wheel drive,
> diesel pickup. Good power, good gas mileage. If they could do that
> at a good price I bet it would sell.
>

Isn't it to do with them having to sell cars in US or Canadian dollars, but
they conduct business in Euro's?... Which did quite a bit better then the US
dollar over the past couple years in trading... So it's harder for them to
make money.

It happened a long time ago too, the German Mark appreciated like crazy and
VW could hardly make money here and had to jack up prices...

"Robert J Carpenter" > wrote in message
...
> The Tuesday, 16 November 2005, Washington Post carried a WSJ article
> about the withdrawal of the VW Phaeton from the US market.
>
> But what really caught my attention was the statement that VW has lost
> $960 million so far this year in the North American market.
>
> That seems incredible to me, but it appears to be correct. How much
> is that per vehicle? If VW is selling 15,000 vehicles per month, that
> would be:
> $960,000,000/(15,000*10) = $6,400 per vehicle !! Aargh!!
>
> Even at $5,000 loss per vehicle ........
>
> That's many times more than GM is losing per vehicle.
>
>
>

Don't those prices in Europe include their (quite high) taxes on cars?
> wrote in message
oups.com...
>
> Brian Running wrote:
>
>> one that thinks the Ridgeline is an Avalanche with Aztek styling?), and
>> Toyota has heavily skewed their product line towards SUVs, minivans and
>
> Maybe it is what the NA customer really wants?
>
>> trucks. I believe it's a quality problem. GM has never made
>> top-quality products, and they refuse even to try. VW seems oddly
>> indifferent to quality problems and warranty claims. I've had no
>
> There should be no financial losses then, as the sucessfuly denied
> claim costs you no money at all You will just lose a customer, but
> as VW produces (almost?) no cars in the USA, it can't make you lose
> money, as your factory eats money elsewhere.
>
> And the VWoA expenses alone can't be so high, even with warranty claim
> expenses.
>
>> unusual problems with my VeeDubs over the years, but the horror stories
>> are out there, and well-known by the public -- meanwhile, VW does
>> nothing to improve its public image regarding those QC issues.
>
> Well, pick your favorite model and look at how much does it cost in NA
> and how much in (for example) Europe. And don't forget to take into
> account all the nice features, such as climate control, power windows,
> alloys etc which usually cost a lot of additional money here in Europe.
> I believe you know how to find the American prices, and the european
> ones could be easily found under www.volkswagen.co.uk or
> www.volkswagen.de with help of the car configurator.
>
> I think this is the real reason, why VW loses so much money. As the
> dollar went down, the prices of imported cars did not rocketed up.
>