Volkswagen has made a huge push in the U.S. in the past two years. Over that span, the German company has launched three cars developed specifically for our market in the Jetta, Beetle, and Passat, the last of which is being built at a brand-new factory in Tennessee. But VW still desperately needs more U.S.-centric products, namely two SUVs, including a three-row crossover to battle the Honda Pilot and a cheaper replacement for the Tiguan to fight for sales with the Honda CR-V and Ford Escape.
The successor to the Tiguan won’t arrive for a few years, we recently learned, but it will indeed be a bit more U.S.-friendly. As we’ve seen in the progress from the anodyne Jetta to the much-better Passat, the company is capable of building good cars targeted for our market. But there’s a real hangup with the three-row people-mover.
Company execs have expressed interest in such a model since at least 2007, and VW USA CEO Jonathan Browning reiterated that sentiment to us last year. At the time, however, he wouldn’t confirm that it was definitely in the pipeline, which we chalked up to typical automaker reluctance to go on record about future products. But we’ve now uncovered more to the story.
We learned at this past week’s Detroit auto show that while many at the company think a three-row crossover eventually will arrive, it doesn’t yet have final approval from VW’s top brass—what gives?
The issue is that even if the crossover is “Americanized”—lesser interior plastics, etc.—the high cost of the upgraded modular MQB platform components necessary to build the SUV would dictate loftier, uncompetitive sticker prices. The Honda Pilot and Ford Explorer both start at just over $ 29,000; Volkswagen’s crossover would need to do the same to sell in volume. The debate rages on within VW about how to bring the costs down and whether even investing in a big crossover is even worth the reward. (We think it would be.) The situation improves if Volkswagen is able to benefit from economies of scale—building more crossovers brings costs down. A potential source of extra volume: Execs from VW’s Czech subsidiary, Škoda, were recently quoted saying that they, too, may want a biggish crossover for their portfolio.
Beyond that, Volkswagen executives say they need to spend the next year or two in the U.S. focused on solidifying the positions of the Beetle and Passat—and, to a lesser extent, the year-old Jetta—in their respective segments. This means time and money will be devoted to everything from advertising to dealer training to quality control. These are all good business practices, but the upshot is that it’s going to be a solid two years before any new VWs are introduced here outside of niche products like the Golf R, the Beetle R, and the Beetle convertible.
Illustration by Christian Schulte
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