Volkswagen May Exit US Market

If Automotive News is to be believed, officials at the US Department of Justice are in discussions as how much criminal fines the Department of Justice can impose on Volkswagen so the threshold of the company exiting the US is reached.

Deja vu

For Volkswagen, this is familiar territory. The German manufacturer has witnessed a sharp drop in sales during the early 1990s. Sales were so down in the 1992 to 1993 period that the brand which once sold the maximum number of imported vehicles in the United States was bleeding money. Build quality of Mexican made Volkswagens were so bad that even Bill Young, the president of its American division did not ride them. He subsequently compelled the German division of the company to fix every quality issue. Young also helped VW dealers to get funds of the amount they would have earned if they had successfully sold properly made cars during that period.

VW was later saved by Concept One, its concept car. This car paved the way for the company’s New Beetle model which the company showcases at North American International Auto Show in 1994. It caused immense interest- so much that when the car became finally available in dealerships, its sales lifted the sales of other VW modesl like Golf and Jetta. The Passat sedan also benefited. Sales went up and dealers saw profits after a long time.

Modernization

The possibility of Volkswagen exiting the United States was a distinct possibility. The company has struggled to comprehend and make profits from the American market from the time its original Beetle model was pushed out from US market by stricter safety and emissions regulations. This new automotive strictures meant that there were no benefits from modernizing a vehicle that was actually designed during the 1930s. Subsequent VW cars suffered from quality problems. Another reason for lack of sales during that time was that the American Volkswagen models were designed with German car buyers in mind and not American ones. The electrical systems and radios were of extremely poor quality. Cup-holders- a standard feature in American cars were consipiscously absent.

Many in the car industry hold the opinion that Beetle success can not be repeated by the company. It was unthinkable that a German car designed during the Second World War would succeed so wondrously. The whole thing went against the standard marketing tactics of that period. At present VW is manufacturing high quality vehicles both in Tennessee and Mexico. The company wants to remain in the United States. 

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