Brocker.Org: Here’;s why VW’;s new Atlas SUV will work wonders for its US business

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The 2018 Volkswagen Atlas.
Volkswagen

In December, Volkswagen’s new Atlas SUV entered manufacturing
at the company’s plant in Chattanooga, Tennessee.

With three-rows of seats and place for seven, the Atlas is
expected to be a savior for VW’s having difficulties US business.

Why?

Because VW cannot look to market cars in the US.

Through November, the Volkswagen brand has managed to transfer just
286,000 cars — down 10% in excess of final 12 months while representing a
minuscule one.eight% share of the US auto market. All the while in
Europe and Asia, VW is 1 of the most competitive models on the
market

These figures are even extra underwhelming when compared to the
one.nine million cars rival Toyota managed to market in the US in excess of the
same interval.

Even though the erosion of consumer assurance stemming from the
company’s latest emissions cheating scandal
unquestionably hasn’t assisted its lead to, it’s not the principal dilemma.



Volkswagen Atlas 2018Volkswagen

VW’s wrestle to market as a lot of cars in The usa as its global
rivals has been a main problem for yrs — lengthy prior to the scandal
broke.

What has been a essential shortcoming of VW’s technique is the
lack of a competitive SUV lineup.

Structural issues

Currently, Volkswagen’s arsenal of crossover SUVs consist of the
compact Tiguan and the mid-sizing Touareg. However, neither are
remotely competitive inside of their segments. Even even worse, VW’s
existing SUV lineup also features important challenges with the way
it’s structured

(Disclosure: The creator of this story is the proprietor of a 2017
Volkswagen Tiguan.)

For 2017, the base, entrance-wheel-drive Tiguan starts at a
realistic $25,000. However, a thoroughly loaded Tiguan can command a
price tag very well north of $35,000. (Incredibly, which is not
wholly out of line for the content you get.) However, these
searching for a bit extra electrical power and place than the Tiguan can offer you
will have to turn to VW’s mid-sizing giving — the Touareg.


Volkswagen VW Tiguan Wolfsburg 2017
2017 Volkswagen Tiguan Wolfsburg
Edition.

Volkswagen

But the Touareg starts at a whopping $50,000. That indicates
likely VW SUV potential buyers will have to opt for concerning two cars with a
price differential of $15,000 to $25,000. As a outcome, even these
intrigued in a mid-sizing VW crossover are compelled to seem
elsewhere for a vehicle able of bridging that hole.

The market for a $30,000 to $50,000 high quality SUV is brutally
competitive — to the position the place smaller missteps can lead to main
challenges. A pricing hole this large is blood in the h2o for VW’s
mass-market and luxurious badged competition — finding off likely
potential buyers left and correct.

Over the previous 12 months, this dilemma has been compounded by heavy
maker incentives and dealer bargains that have
dramatically reduce the Tiguan’s transaction prices — normally situations
lopping $4,000 to $five,000 off the sticker. At the same time, VW
has declined to closely low cost the Touareg.

VW’s technique has assisted Tiguan sales in the US, which had been up
23% by the end of 2016.

This is the place the Atlas rolls in.


Volkswagen VW touareg Wolfsburg 2017
2017 Volkswagen Touareg Wolfsburg
Edition.

Volkswagen

With an expected price in the $35,000 to $45,000 range, the
mid-sizing crossover offers VW an all-new product with
condition-of-the-art tech and powertrain options to fill in that hole.
At the same time, the Atlas will also permit VW to market the
Touareg as a niche efficiency SUV.

Soon after all, the Touareg shares much of its engineering with its
large-profile cousin — the Porsche Cayenne.

However, the Atlas’ entire effect on Volkswagen sales may well consider some
time prior to it’s actually felt. The brand is new to the larger
crossover market and will have to have some time to introduce
individuals to the concept of a three-row VW.

Product or service issues

Through November, VW has managed to transfer just 38,000 Tiguans in
the US. This pales in comparison to the 320,000 CR-Vs and the
315,000 RAV-4s Honda and Toyota have managed to market respectively
in the same interval.

The existing era Tiguan provides solid driving dynamics, a
peppy turbocharged motor, and a large-quality interior. However,
the compact VW crossover is just about a 10 years previous, provides very poor fuel
economic climate, and until recently, was also large-priced to contend
towards its American and Japanese rivals. Even though its compact
proportions are perfect for the European and Asian markets, a lot of
US individuals had been set off by the Tiguan’s limited cargo area.


VW Volkswagen atlas factory
The new Atlas at VW’s Chattanooga, Tennessee
plant.

Volkswagen

Luckily for Volkswagen, an all-new Tiguan — currently on sale
in Europe — will arrive in US showrooms for the 2018 model 12 months.

Factors are even even worse with the Touareg. VW has managed to market
just 3,800 models so considerably this 12 months, representing just .2% of the
mid-sizing SUV market. Even though the Touareg is a very able
off-roader and options a heavy dose of Porsche DNA, its motor
options and style and design are commencing to really feel lengthy in the tooth.

Because neither the Tiguan nor the Touareg had been designed for the US
market, the two struggled to cater to nearby tastes. That may well not be
an problem with the Atlas. It truly is brand-new, American built with the
sizing, place, and tech options US individuals crave.

The 2018 Volkswagen Atlas built its environment debut in November at the
2016 LA Car Present and is expected to arrive in showrooms in this
spring.

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