published Thursday, January 21st, 2010

VW dealers feel charged up

Audio clip

Brad Cobb

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    Staff photo by Angela Lewis/Chattanooga Times Free Press Coby Martin details a Jetta at Village Volkswagen on Wednesday.

HERNDON, Va. -- Volkswagen dealers who didn't believe the automaker had much of a future in the United States have changed their minds after seeing the company's growth plans, an official says.

The aim of VW has been to "reawaken them from a winter sleep," said Stefan Jacoby, Volkswagen Group of America's president. "We believe we are preparing them for the future."

Mr. Jacoby said dealers who were little motivated and skeptical about the automaker's U.S. outlook in the past are seeing things differently.

"Dealer satisfaction is the highest in 10 years," Mr. Jacoby said earlier this month to journalists at VW's American headquarters outside Washington, D.C.

Mr. Jacoby said 66 of VW's 580 dealers nationally are investing in new facilities.

Volkswagen, with its new Chattanooga plant helping lead the way, plans to double U.S. sales in two to three years to up to 450,000 vehicles. By 2018, the auto company wants to sell 1 million VWs and Audis in the U.S.

Brad Cobb, a partner in Village Volkswagen in Chattanooga, said if the auto market returns from its slowdown, he believes VW can reach its sales goals.

"With the U.S. plant and products and the momentum of a new advertising firm, they're definitely ramping up to hit those numbers," he said.

Mr. Cobb said the majority of the automaker's dealers are ready to sell more VWs. Village Volkswagen recently upgraded its sales space, and Mr. Cobb said it has always valued customer service.

Jim Medlen, manager of Al Johnson Volkswagen in Dalton, Ga., said he'd like to double sales in the next two or three years.

"Volkswagen is coming out with real strong programs and incentives and making good new product," said Mr. Medlen, adding that dealer-principal Al Johnson has been in business for 41 years and "customer satisfaction is the No. 1 goal."


Among keys for VW growth from a dealer standpoint:

* Focus on the customer experience

* Enhanced investment in facilities

* Encourage customer loyalty

Source: Volkswagen


* More than 80 percent of VW's 580 dealers in U.S. are profitable.

* Exclusive dealers account for 75 percent of VW's sales volume.

* Surveys suggest that car buyers are more likely to consider buying a VW than they were a year ago.

* Certified preowned sales increased more than 20 percent in 2009.

Source: Volkswagen

Among keys to preparing for growth from a dealer standpoint are to focus on the customer experience, enhanced investment and customer loyalty, Mr. Jacoby said.

He cited the recent plan to put a Volkswagen and Audi dealership in New York. Volkswagen has signed a $125 million deal for a 265,000-square-foot building in the high traffic area of 11th Avenue in Manhattan.

The VW store is expected to open this spring and the Audi store in late 2011. Both will have new showroom concepts.

In addition, the auto company will have central city presences in Atlanta and San Francisco, Mr. Jacoby said.

Chattanooga is expected to co-host Volkswagen's U.S. dealer network in 2010 as the group brings its national convention to Tennessee.

The Chattanooga plant, expected to start production in 2011, is to produce 150,000 midsize sedans a year.

Mr. Jacoby said the plant will "establish VW as a true volume producer" and help it sell to a broader public.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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rdecredico said...

They still build over-expensive, over-priced, technically flawed machines that have one of the highest costs of ownership.

The VW trump card has been their advertising and PR which convinces mostly young people (by taking advantage of their ignorance), that their cars are the epitome of style, fashion, and fun.

Fools wanted.

January 21, 2010 at 10:11 a.m.
flith said...

I guess rdecredico didn't own a TDI (diesel). My 2004 Jetta TDI had a low cost. 45 mpg 10k oil change intervals.

January 21, 2010 at 6:43 p.m.
Bltprf502 said...

Well, after having my 5th VW (I have 2 now) your post could not be any more inaccurate. They don't cost any more than other cars in their class. If you maintain it like any other car they serve as a fine choice. My Lexus I had before the Passat (I currently drive) was the highest ownerwship cost I have had of any vehicle that has been in my fleet. German engineering is second to none. I am proud to have VW come to Chattanooga. Not to mention the Americans could stand to learn a thing or two from the Germans... In more ways that building cars. It is a God send to hav VW come to Chattanoga.

January 21, 2010 at 6:46 p.m.
Bltprf502 said...

I failed to spell check my last post. My apologies... If you haven't tried a VW... Its a great, fun little car that is a joy to drive and own. My Wife has one. She will chime in I'm sure here pretty soon....

Fools wanted :) Right on!

January 21, 2010 at 7:03 p.m.
rdecredico said...

flith: I did own a deisel. A Passat. It sat for months while I was in arbitration over Lemon Laws. It died with less than 5k on it when the glow plug blew up and a piece of it entered the combustion chamber. The engine seized. Parts...unavailable...because they re-engineered the Jetta engine and stuck it into the Passat (big mistake). It sat at the dealer for months....MONTHS....while they kept saying they would eventuially fix it (fats forward 5 years and it still isn't working and I now have a 34K judgment against me since I refused to keep paying the loan.

Their last generation of diesel engines (pre 2002) were very nice. Their newest batch are pure crap.

I have owned as many as 6 or 7 VW's in my life....all had electrical issues (they all do) and any with Turbo's will have major repair bills at the 50-75k barrier.

I maintain their current generation of vehicles are overpriced, costly to run and maintain, are not dependable after 50k, and are sold and targeted at young, un-wise hipsters.

YES, they are a BLAST to drive. But they are mechanically flawed (on purpose). It is called designed obsolescence.

January 21, 2010 at 8:01 p.m.
rdecredico said...

An aside: Their most fun car to drive was the Champagne Edition Rabbit, circa 1979-81.

Too many people get suckered by the fun to drive part. I know I did...REPEATEDLY...hehe! (we are all fools at some with it! fortunately my flirtation with foolishness was just money and cars and not lifestyle or people like most of the southern arsehats that populate this region.

But, I digress. Take a real good and honest look at how many older (7+ model years) VW on the road --almost zero!--compared to Japanese products -- which routine keep their engines running well beyond 200k and 10 years.

I maintain: Fools wanted.

January 21, 2010 at 8:15 p.m.
JBaustian said...

VW dealers may feel "charged up", but they are the weakest link in the growth of the VW brand in North America.

VW builds good vehicles -- well-designed, expertly engineered, with excellent manufacturing. But when customers run into problems, and every car buyer does eventually, they expect quality service from their local dealer. VW dealership service departments do not provide good service or a good experience. If it was not for independent shops with good VW mechanics, there would be a lot fewer VWs on the road, because the dealerships are doing a terrible job.

Whenever you hear someone bad-mouth Volkswagen, invariably it is because of a bad service department experience at a VW dealership.

January 21, 2010 at 8:29 p.m.
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