Volkswagen: The Jetta is the new entry-level model

Geneva, Switzerland – Breaking news from VW: First, a game of musical chairs is going on between the Golf and the Jetta, with the latter becoming Volkswagen Canada’s new entry-level model. Second, other vehicles we’d love to have here in the True North will be out of reach for Canadians. And finally, Volkswagen announces its colossal goal of becoming the world’s number one manufacturer by 2018. Volkswagen is really biting off a lot this time...

At the 80th Geneva Auto Show, Volkswagen didn’t hold anything back. As the top manufacturer in Europe, armed with its nine brands, its new allegiance with Porsche and its recent participation in Suzuki, the company made it clear that its intention is to become the world’s number one manufacturer – yes, ahead of GM and Toyota – by 2018. It’s currently number three in the world.
2010 will be particularly prolific for VW with (count ’em) 70 new models introduced through its subsidiaries: Volkswagen, and also Audi, Seat, Skoda, Bugatti, Bentley, Lamborghini, its commercial truck division and Scania.

A first electric car in 2013

In Geneva, Volkswagen also stated that it will be the first to sell electric cars with the e-Up! at the beginning of 2013, followed by the e-Golf and e-Jetta that same year. VW claims that five years later, 3% of all its sales will be “electric.” The snag is that Volkswagen isn’t alone in the race to the electric car. The Toyotas and GMs of this world are fighting hard to be the first to produce a pluggable version of the Prius or the Volt, and they’re just a step (okay, a big step) away from creating a car that is 100% electric.

Meanwhile, Volkswagen is a relative newcomer to the hybrid market. Over the last ten years, Toyota has launched seven hybrid models – and an eighth was announced in Switzerland: the little Lexus CT200h. As for VW, it’s just preparing to launch its first hybrid model, the Touareg Hybrid, which should be followed by the Jetta, then the Passat.

That giant neighbour…

Beyond these obstacles, you know what Volkswagen Canada’s biggest handicap is? It’s the fact that our giant neighbour, the United States, doesn’t paddle in the same direction as we do. That’s why the German manufacturer’s Canadian branch had to change the Golf’s name back to its old moniker in 2008 and 2009. Rabbit-Golf-Rabbit…  But this game of musical chairs comes to a happy end with the sixth and new generation of the sub-compact. The Volkswagen Group said “enough is enough” and decided that it’s going to be Golf for the whole planet and America is going to have to accept it. Volkswagen Canada may not say it out loud, but they’re breathing a sigh of relief...

The Jetta to be the entry-level model

Another game of musical chairs is shaping up for Volkswagen Canada, but this time they’re calling the shots. Indeed, the arrival of the new generation Jettas will help Volkswagen Canada make the sedan the new entry-level model in our country.

Believe your eyes: the Jetta will be less costly than the Golf. The Canadian head honcho, John White, explains this repositioning: “We want to offer the new Jetta in a wider range of prices. At $21,775, the current model certainly comes well equipped, with power windows and a five-cylinder engine. But we’re missing the bottom end of the market.” He also adds: “We have great expectations in terms of volume for this new Jetta, with its European look. If we want to compete with the Toyota Corolla and Honda Civic, we need a more flexible offer.” More flexible as in a price slashed by nearly $5,000, it seems.

However, there will be no overlapping of the generations like there was with the exclusively Canadian City line, which appeared in 2007 and is now on the way out. In fact, a single Jetta (new generation) will be offered, but because it will (still) be assembled in North America, different versions will be made, including lower-end models (read: with less equipment). That will not be the case with the Golf, a German import, which was designed with a global strategy to come fully equipped. In other words, there’s no flexibility in price or equipment for the Golf.

The details in July

But how do you make a compact sedan that costs less than a sub-compact? John White’s answer is: “We’re not ready to unveil our strategy yet. That’s something we’ll only reveal next July.” However, we’d put two bucks on the fact that beyond the current 2.5-litre five-cylinder engine, the new Jetta could end up with the old four-cylinder 115-horsepower engine...

What to watch for...

What does the near future hold for Volkswagen Canada? The new Touareg will arrive in the fall, followed by a hybrid version for the 2012 model year. Then the new Jetta, and then the intermediate sedan assembled at the new American plant in Chattanooga. A few design sketches have already been released, and we suspect that the new car will replace the Passat.

2011 will see the coming of the second generation of the New Beetle, but it will mean saying good-bye to the new Amarok pick-up that was introduced in Geneva (yes, a German pick-up) and will be distributed in South America. You can also kiss the little Polo good-bye, GTi version or otherwise.  Indeed, when Americans (them again...) say no to a product, Canada has to accept that we cannot assume the costs of adapting and distributing it for our market all by ourselves.

No, no Polo

Moreover, Christian Klinger, Volkswagen’s global head of sales and marketing, confirmed in Detroit this January that he had no intention of bringing the Polo to North America. He justified the decision by listing all of the sub-compacts invading the continent this year: the Ford Fiesta, Mazda2, Chevrolet Spark… The pieces of the pie are getting smaller and smaller, which John White understands all too well. “The sub-compact market in Canada is growing, but this segment’s going to become very crowded. There are a lot of players in a category that isn’t terribly large.”

In closing, White said: “You also have to remember that the return on the investment isn’t easy with small cars. Their prices are very low, so it’s tough to make money on them.”

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