OT-The $75,000 People's Car

VW's $75K "People's car" Forbes Magazine, October 27, 2003 by Allison Fass [somewhat edited]

Bet you didn't know that VW stands for "Very Wealthy."

VW is ramping up its image and prices. For the starting price of a basic Phaeton, car shoppers could buy 75 Beetles at the 1949 price [which the article states was $800].

As Volkswagen of America was plotting the launch of its Phaeton luxury sedan 18 months ago, 50 or so people in New York and Los Angeles received dinner party invites from good friends.

At six separate gatherings in private homes, where salmon was served along with copious glasses of fine wine, the conversation eventually turned to luxury cars.

The grape loosened tongues, but it didn't soften the almost-collective opinion: "We heard over and over again: Why buy anything but a BMW or a Mercedes?" recalls Karen Marderosian, marketing director at VW. The carmaker was revealed as the host only after dessert.

That sentiment, persistent and pervasive, poses a tough challenge for the Phaeton. VW hopes its unlikely high-end car, which begins hitting dealerships in November, is better received stateside than it was in Europe. Only 5,100 Phaetons have been sold there since May 2002, making it unlikely that the Phaeton's glamorous $200 million glass-enclosed factory in downtown Dresden will crank out the 150 Phaetons a day it is capable of producing.

"Introducing a high-end luxury car under the Volkswagen brand is a clear flop," says Himanshu Patel, European automotive analyst at J.P. Morgan in London. "Was there any financial logic to doing this? I don't think so."

There have been whispers that VW, said to be losing $69 million a year worldwide on the Phaeton, might scrap its U.S. launch. But the plucky company insists it isn't abandoning the VW brand's most expensive offering to date.

It covets the fat margins that come with luxury cars. It also hopes to expand its customer base and keep 15% of its drivers, an otherwise loyal bunch, from abandoning VW when they move on to high-end wheels.

But will car shoppers with household incomes of $250,000 and up consider the Phaeton, even if they can pronounce it? The big sedan certainly offers luxury frills. Among them: an engine of up to 12 cylinders delivering 420 horsepower, back-massaging leather seats, a high-tech navigation system and humidity control.

[...] [VW] is inviting 56,000 consumers to take the car for a spin. The company says 7% of recipients in the first wave of mailings indicated they were interested.

Consumer interest may be piqued, but there are still doubters. "Despite all the technology and all the engineering packed into that car, it still is a Volkswagen," sniffs Marc Soukup, sales and marketing director at Town Motor Car, an Audi dealer in Englewood, N.J. "People don't want to pull up to a country club driving a $60,000 VW."

Reply to
cloud8
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....................They may have to re-badge it as an Audi. They finally killed the original beetle this year and now they want to sell SUVs to style conscious Americans as well as cash in on the huge profits and prestige of the luxury car market..................a-holes.

Reply to
Tim Rogers

VW should have stayed at what it was good at. Low priced cars offering good value and quality. But no that was not good enough and they wanted to get into the high profit SUV market. Look at Hynudai. They may have to sell 5 Accents to equal the profit on One SUV, but they are selling a lot of accents, so it would be interesting to compare the balance sheet of both VW and Hyundai. Bill Berckman

67 Beetle Pictures at
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VW/Porsche Family Reunion Show 2003 Pictures
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Reply to
Bill Berckman

snipped-for-privacy@aol.comSPAMOUT (Bill Berckman) wrote in news: snipped-for-privacy@mb-m07.aol.com:

They lost their edge to the Japanese in the 70s. And it's their own damned fault...I won't even mention the arrogant dealerships, the POS Rabbit (mine was at any rate)...and here's a sorry assed attempt to cash in on upscale SUVs. All I can say is, for the $75K VW wants for a 12 cylinder Phaeton, I could have a different car to drive every day of the week. Fun and reliable cars too.

Reply to
cloud8

Too late... I already saw one driving around town with a VW badge...

Reply to
VWGirl

On Wed, 15 Oct 2003 18:52:04 -0400, "VWGirl" shared the following:

I've only seen one VW badge since I sold my baja the other day. It was on the hood of a '74 VW... (old-timers will probably "get" this...)

-- Travis

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meek shall inherit the earth. After I'm finished with it.:wq!

Reply to
travis

I have to agree the monster luxo car will definetly be a flop but some have actually suggested that the arrogant big wigs at VW couldn't stand going to the big automotive get togethers with the other mfrs in a lowly Passat even if it did have a V8.

You can't jump into that market from the sidelines w/o deep deep pockets of cash to keep you afloat while you 'build' (give away cars at cost to move them) market share.

I think they are idiots.

Reply to
Chris D'Agnolo

On Wed, 15 Oct 2003 19:15:36 -0400, travis ran around screaming and yelling:

he he... J

Reply to
Joey Tribiani

LOL

It's funny when you say it... just not chris... :-P

Reply to
VWGirl

On Wed, 15 Oct 2003 22:55:38 -0400, "VWGirl" ran around screaming and yelling:

hey...don't drag me into this...hehe J

Reply to
Joey Tribiani

I said CHRIS! Pay attention dear!

Reply to
VWGirl

On Thu, 16 Oct 2003 22:41:10 -0400, "VWGirl" ran around screaming and yelling:

was i wrong in assuming you meant me? J(chris/bugninva/asshole/etc)_

Reply to
Joey Tribiani

I didn't know you were out of the closet!

Reply to
VWGirl

On Fri, 17 Oct 2003 07:01:53 -0400, "VWGirl" ran around screaming and yelling:

im not sure i want to be refered to as "out of the closet" considering i was never in a closet!!!! if you mean as far as joey being chris, everyone, except a couple people(sorry john, not picking at scabs) knew from the get go...was never a "secret"... J

Reply to
Joey Tribiani

ok..

Reply to
VWGirl

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