Volkswagen’s new CEO Martin Winterkorn intends to fill “lucrative market niches” with new models over the coming years. The plan aims to boost profit while shrinking capacity.
“The Volkswagen brand is far from tapping its full potential,” Winterkorn said in a letter to employees obtained by Bloomberg.
It’s unclear what niches Winterkorn plans to fill, but the forthcoming Scirocco and Tiguan could arguably fall into this category. Oddly, Winterkorn is rumored to have considered canceling the Passat coupe, Scirocco and Tiguan projects, but too much had already been invested in their development.
Several media reports have indicated Winterkorn is not satisfied with the three vehicles, but it’s not known what his specific concerns are. Many enthusiasts criticized the Scirocco for looking too much like a hatchback and not enough like a coupe.
Winterkorn is reported to have delayed the launch of the Passat coupe, originally slated for the Geneva Motor Show. A lack of design creativity might be a concern with all three models, given Winterkorn’s upscale niche market ambitions.
As previously reported, Winterkorn asked VW’s new design chief, Walter de’Silva, to rework all of VW’s upcoming models. De’Silva was previously head of design at Audi, until being transferred to VW last month.
While at Audi, de’Silva was very critical of VW’s recent decision to copy Audi’s single-frame grille and the exterior similarities on VW vehicles, according to Automotive News.
Under Winterkorn’s direction, de’Silva’s job is now to create distinction between VW, Audi, Seat, Bentley, and Lamborghini. How Volkswagen will target upmarket niches like those occupied by Mercedes-Benz while not conflicting with Audi remains to be seen.



02/05, 2:39 PM
posted by:
SRT-4Ken
—–>what i’m thinkin is how in the world will they re-invent the VW Beetle a few more blocks down the road?………..but then again, i forgot about the Porsche 911….
02/05, 2:53 PM
posted by:
Syrax
passat coupe? cancelled? why?
02/05, 2:55 PM
posted by:
6ix
Passat coupe? How did I not hear of this before???
02/05, 3:01 PM
posted by:
Bush
Up market VW’s? What is Audi? Drop Audi? This is more BS like the Phaeton (though it was a nice car it only looked like a Passat in steriods). They are trying to push VW into something which it is not. Great cars, fun to drive etc. Focus in the long term quality first.
02/05, 3:06 PM
posted by:
YourNameHere
VW should not sell a car over 40,000. no jetta/rabiit should go over 25k. we better be getting that twincharger engine!
02/05, 3:08 PM
posted by:
sampson
small RWD coupe with backseats would be an awesome niche to fill VW!!
02/05, 3:38 PM
posted by:
Madcapp
You might as well forget the Passat coupe, it was supposed to be one of those so-called 4 door coupes like a Mercedes CLS class. I’m comprehensively unimpressed, I know the coupe/sedan distinction has to do with interior space, but you know what, if you’re gonna call it a coupe, make sure its got 2 doors. Don’t bother trying to market a 4 door vehicle as a coupe, it just confuses the issue.
02/05, 3:44 PM
posted by:
Renton
GX3 — that is niche. Make it.
02/05, 4:00 PM
posted by:
atomicbri
VW against Mercedes?? Not again, I thought VW learned the lesson with the Phaeton…In the states VW is known as a good for the money German car, not a Mercedes, so they need to stop that line of thinking. Even in Europe, VW is considered a premium, but a premium hatch/family car. I don’t mind better styling or more innovative styling, but Audi should be the Mercedes/BMW Competitor, not VW.
02/05, 4:00 PM
posted by:
norsairius
^ I agree with Renton. There is a market for that car. Just keep it relatively cheap. I personally liked it a lot.
02/05, 4:03 PM
posted by:
Syrax
i get pissed with this too. a coupe has to be a 2 door car, period.
02/05, 4:05 PM
posted by:
meanpants555
Walter de Silva has got his work cut out for him: if you look at his body of work he has a design schtick.
02/05, 4:05 PM
posted by:
Syrax
and to remind everyone…they dropped the phaeton ONLY in the states… europe and the whole world still get it.
02/05, 4:06 PM
posted by:
meanpants555
Also Winterkorn’s comments helps explain VW snagging Lotus.
02/05, 4:07 PM
posted by:
meanpants555
Winter-korn? What a lousy last name. Is it the opposite of Summer-squash?
02/05, 4:08 PM
posted by:
Syrax
even that ass all-non-british-hater jeremy clarkson said it was a great car…
02/05, 4:28 PM
posted by:
Madcapp
The Phaeton is an outstanding car. The reason it did not sell and was withdrawn from North America is because it doesn’t have a premium badge, and the overwhelming stupidity of those who can’t look past that. But the Phaeton is brilliant.
02/05, 4:38 PM
posted by:
auto_industrialist
anyone that thinks VW will not succeed in ‘niche’ markets has no education in marketing.
I’m a marketing major and this is exactly what VW needs to do. Trust me, the whole desperate for power and presence baby boomer generation is fading! give way to the young and the wealthy
02/05, 4:46 PM
posted by:
naggs
“lucrative market niches”
sounds like a good strategy, people are willing to pay more if you give them what they want. for example i have been waiting for a lightweight rwd minimalist coupe for ten years (i had high hopes for the dodge razor) but noone wants to make it because it wont sell a bagillion a year. at this point i would settle for a stripped out version of an overweight 350z or mustang if thats my only hope.
modern flexable manufacturing will only increase the profit margines for companies willing to step out of their comfort zone and deliver on niche products
02/05, 4:54 PM
posted by:
naggs
is “lucrative market niches” the same as “upmarket niches”?
is there really no way a company can make money on a $20-30 niche product?
02/05, 5:08 PM
posted by:
meanpants555
The Phaeton was an overweight cow. Ugh. I am sure you can pick them up for cheap second hand.
02/05, 5:13 PM
posted by:
1966_GTO_
VW’s should not cost over $40k. There is no market for them above that…
02/05, 5:15 PM
posted by:
Piablo
Naggs – It’s very possible to make money on $20 to $30K niche vehicles. The solstice is proof of that. However, VW is not going for that type of niche. “The plan aims to boost profit while shrinking capacity.” In order to accomplish this, vehicle prices need to rise. The only way to discount a vehicle is through economies of scale. They need to sell volume in order to spread the R&D costs enough to make a car affordable.
Who knows, maybe the move only involves consolidating factories and eliminating the leftovers. This would not effect volume. But “niche” vehicles causes me to believe the latter.
So much for Volkswagen ~~ The People’s Car.
02/06, 2:04 AM
posted by:
europerspective
I’m sure he is talking about something along the lines of an example set by Toyota and emulated by other mainstream manufacturers. Vehicles like the MR2, Scion models and The RAV4 are examples of how mainstream manufacturers can target niches effectively.
VW has missed out on some recent trends; they were very late with the small MPV, and they were not able to get into the small hard-top convertible market to compete with Peugeot’s 206CC, the Nissan Micra and Vauxhall Tigra.
I imagine what he’s talking about is ensuring that they latch onto these new trends quicker in future.
02/06, 10:29 AM
posted by:
1234
This is good news if true because VW has been ignoring one of it’s already well established “lucrative market niches” for almost a couple of decades now – the Vanagan / Westphalia pop-up camper market. There is actually a HUGE and potentially very lucrative market niche for these vans. Incredibly, almost 17 years after the last one was imported into the US, those vans that are still functional continue to sell like hot cakes among outdoor and VW enthusiasts.
A 1991 AWD VW Westphalia remains one of the most in demand vehicles for people who recreate outside. Affluent buyers who are also climbers, kayakers, skiiers, hikers, mt bikers or just VW camper van enthusiasts have been keeping the used market for these vans hot for years. VW has continued to produce and sell these pop-top campers across the world as Eurovans – complete with diesel engines and AWD however in spite of the pleas of buyers and for some other unknown insane reason, VW has stubbornly refused to import these vans for the US market. The continuing demand for the smaller pop-top campers has created an entire cottage industry producing parts and even $7k Subaru engine upgrades in an effort to keep these vans on the road.
VW doesn’t need to “establish” a new niche market – there’s already one here that is earnestly waiting to buy their product. Come on VW – wake up and give us those vans!
02/06, 12:39 PM
posted by:
SSTRFSTR
Diesels! Diesels! Diesels!
That’s how you tap a growing niche market, in the US at least.
02/06, 3:18 PM
posted by:
Get Real
Isn’t this “niche” a way of admitting (in a positive light) that your cars don’t sell well, and you can only become a boutique dealer of poor quality merchanise?
02/07, 8:49 AM
posted by:
europerspective
1234, I recreate outside whenever I get a chance… nothing like a sandy crack on a moonlit night, wind whipping around your naughty bits