With vehicle sales slumping fairly evenly across the board albeit with a few exceptions, raising new car prices may not sound like a good strategy during these difficult times, but VW is considering just such a move. A company representative said on Wednesday it cannot compensate for rising raw material prices entirely in-house, and needs to look at other options.
The news came from Volkswagen’s executive VP of VW group sales and marketing, Detlef Wittig, who said in a conference call to journalists that other automakers are scared of passing their higher costs onto the car-buying public, says an Automotive News report.
“The industry does not seem to be able to compensate all the price hikes except through rationalization programs only,” he said.
Wittig does recognize the touchy nature of such a decision, however, as he also said “We are acting in a very competitive market, so we have to watch our competition as well.”
While it is not known which models will be affected if VW does decide to go ahead with the plan, or how much prices will rise, the changes could come into effect in the second half of 2008.
In order to make its cars more profitable in North America, VW recently announced it will open its first U.S. plant in Tennessee by 2011.


07/24, 9:32 AM
posted by:
HemiRoadRunner
They would make more money if they raised the prices on what they charge to repair these pos’s.
07/24, 9:34 AM
posted by:
xyunya
I think it is a sound decision. Since no one with IQ higher then that of chimpanzees is observed driving those piles of errors, the price difference will be irrelevant to them
07/24, 9:44 AM
posted by:
lou3000
My guess is that they are getting killed on warranty repairs. It probably cost VW $15k per car just to keep them running while under warranty.
07/24, 10:12 AM
posted by:
maxcar
what are you people talking about. have you ever owned a VW in recent years?
07/24, 10:18 AM
posted by:
Htay9500
I’d be caught dead driving in an eos or beetle (thats still around?). its a shame they appeal to high-school and college girls who know no bounds of their surroundings.
07/24, 10:19 AM
posted by:
Htay9500
and I, mechanically, don’t want to be working on it.
07/24, 10:39 AM
posted by:
xyunya
The results show the number of failures reported for every 100 vehicles (3 -9 years-old) covered by Warranty Direct’s policies.
And just so you understand what the numbers mean: Mazda, with a score of 8.04%, would mean that nearly 92 percent of the Mazda cars covered experienced no mechanical failure of any kind … pretty darn good.
# 1. Mazda - 8.04%
# 2. Honda - 8.90%
# 3. Toyota - 15.78%
# 4. Mitsubishi - 17.04%
# 5. Kia - 17.39%
# 6. Subaru - 18.46%
# 7. Nissan - 18.86%
# 8. Lexus - 20.05%
# 9. Mini - 21.90%
# 10. Citroen - 25.98%
# 11. Daewoo - 26.30%
# 12. Hyundai - 26.36%
# 13. Peugeot - 26.59%
# 14. Ford - 26.76%
# 15. Suzuki - 27.20%
# 16. Porsche - 27.48%
# 17. Fiat - 28.49%
# 18. BMW - 28.64%
# 19. Vauxhall - 28.77%
# 20. Mercedes-Benz - 29.90%
# 21. Rover - 30.12%
# 22. Volvo - 31.28%
# 23. Volkswagen - 31.44%
# 24. Jaguar - 32.05%
# 25. Skoda - 32.12%
# 26. Chrysler - 34.90%
# 27. Audi - 36.74%
# 28. Seat - 36.87%
# 29. Renault - 36.87%
# 30. Alfa Romeo - 39.13%
# 31. Saab - 41.59%
# 32. Land Rover - 44.21%
# 33. Jeep - 46.36%
07/24, 10:46 AM
posted by:
HemiRoadRunner
That’s BS dude. NO WAY kia is in the top 5. I think someone tampered with that $H!T.
07/24, 10:47 AM
posted by:
Htay9500
“# 9. Mini - 21.90%”
gives me a good chance to get one.
07/24, 10:48 AM
posted by:
Htay9500
xyunya: how come theres alfa, fiat and seat on this?
07/24, 10:55 AM
posted by:
johnnycanuck
xyunya: what about Dodge? Or did you just cramp up after you got to Jeep?
07/24, 11:08 AM
posted by:
xyunya
I did not make this up: I just googled car reliability and besides JD Power this one was available. JD Power impossible to use: no numeric/rating information. Obviously it is from Europe and probably UK (where else you would get this?).
Of course Mini is high on the chart, because the scale for 3-9 y.o. cars and Mini is selling for only 5 years.
Kia is manufactured in a number of European countries now, and I am not surprised that they are on top of charts. And again the argument I applied to Mini goes for Kia.
VW is probably a bit beautified: there are much more VW on roads in Europe then in US, especially with diesels. But interesting that VW is ranked ahead of Audi.
It is internet posting, take it for what its worth. Perhaps a good number of new cars owners did not buy Warranty Direct policy, so I don’t know how large is their sample is.
07/24, 12:44 PM
posted by:
brassmonkey
Is the increase in price an effort to offset the high cost of recalls? Maybe the schnitzel sucking krauts should make a good car to begin with…
07/24, 1:33 PM
posted by:
tob
VWs are problematic. I had a MKIV GTI and Jetta and they made mutilple trips to the stealership for warranty work.
07/24, 11:33 PM
posted by:
lou3000
@maxcar: Yes, I had a brand new Jetta 3 years ago. Worst car I’ve ever owned.
07/25, 12:24 AM
posted by:
maxcar
i stand corrected. I guess I’ve just had an awful lot of luck with my last three cars. I found this article from consumerreports.org. Prolly breaking all kinds of copyright laws, but here goes anyway:
Overall, the best cars sold in the U.S. are made by Honda. That’s the conclusion of a recent analysis conducted by Consumer Reports that looks at the reliability, performance, fuel economy, comfort, interior fit and finish, and ergonomics of 262 vehicles we’ve recently tested.
Honda, with an overall score of 78, is followed closely by Toyota (75) and Subaru (72). BMW, Mazda, Nissan, and Volkswagen are tied at 71, after rounding.
Detroit automakers garnered some of the lowest scores, but we have seen some significant signs of improvement in Ford and GM vehicles this past year.
The overall score for each automaker is based on the average overall scores of its vehicles in our road tests and its average predicted-reliability score from our Annual Car Reliability Survey, which details the problems subscribers have experienced with almost 1.3 million vehicles. We included manufacturers only if we tested at least five of their vehicles. See the automaker reports cards (available to subscribers) for a summary of each.
Other findings include the following:
Only two automakers, Honda and Subaru, earned the distinction of having all of the models we tested make our Recommended list. Because we have not yet tested the redesigned Subaru Impreza and WRX, Honda is the only automaker whose entire model lineup is currently recommended.
Some vehicles that do well in our testing tend to have a relatively high number of problems reported by owners in our reliability survey. For example, vehicles built by Mercedes-Benz and Volkswagen (including Audi) achieved the best average scores in our tests. But the reliability of Volkswagen vehicles overall is below average, while Mercedes’ reliability is well below average. We don’t recommend vehicles with below-average reliability, which limits the number of recommended models for those automakers.
On the other hand, some vehicles that are very reliable don’t post the best scores in our testing. Some Subaru and Toyota models, for example, score midpack or lower in our testing but are very reliable overall.
Of all the Ford vehicles we’ve tested, the percentage that we recommend jumped to 64 percent from 54 percent last year, due to improved reliability. The percentage of GM vehicles we recommend, however, dropped from 36 percent to 30 because some redesigned SUVs proved unreliable. Similarly, Chrysler’s percentage dropped from 21 percent to 14, due to a number of unimpressive new vehicles.
SETTING THE STANDARD
Honda earned the top score in our analysis because it builds very reliable cars that perform very well. Its average test score is only slightly under Volkswagen’s and Mercedes-Benz’s. And Honda is the only automaker to earn an excellent overall reliability Rating.
But not all of Honda’s models lead their class in our test Ratings. The redesigned Honda CR-V SUV, for example, can’t quite match the top-ranked Toyota RAV4. The Accord was edged out by the Nissan Altima. The Honda Odyssey minivan scored slightly lower than the Toyota Sienna. And some of Honda’s upscale Acura models trail their Lexus counterparts from Toyota. But Honda’s strength is its consistency; its vehicles typically rate near the top of their categories.
Toyota continues to build some very impressive vehicles, such as the new Highlander, our top-scoring three-row SUV, and the Lexus LS, which earned the highest score in our current Ratings. But the automaker’s reputation for reliability has shown some cracks. For the first time in years, three Toyota-built models had below-average reliability in our survey. They included Toyota’s redesigned V6 Camry sedan and four-wheel-drive V8 Tundra pickup, and the Lexus GS with all-wheel drive. Still, the company builds very reliable vehicles overall and ranks third in reliability among auto manufacturers.
UPS AND DOWNS FOR DETROIT
The past year has been a mixed bag for domestic automakers. Detroit’s share of the North American market dipped to its lowest level ever, just above 51 percent. For the first time in history, Toyota outsold Ford in the U.S. and outsold GM worldwide to become the world’s largest automaker. Sales shrank almost 12 percent at Ford, 6 percent at GM, and just over 3 percent at Chrysler. Ford and GM racked up billions in losses. And after a nine-year merger with Daimler, which owns Mercedes-Benz, Chrysler was sold off at a multibillion dollar loss.
On the positive side, all three automakers are restructuring, and there are clear signs of improvement from Ford and GM.
In recent testing, vehicles such as the Buick Enclave, Cadillac CTS, Chevrolet Malibu and Silverado, GMC Acadia and Sierra, and Saturn Outlook ranked among the best in their categories. GM’s older models, however, continue to drag down its average test score. GM also builds some reliable vehicles, but overall it ranks second from the bottom in reliability, above only Mercedes-Benz.
Ford has climbed to fifth place in our reliability standings. In our latest survey, 93 percent of Ford models had average or better reliability, up from 63 percent last year. But some of Ford’s latest SUVs have not matched their competition in handling, braking, or interior fit and finish.
The most recent Chrysler vehicles we’ve tested have been very disappointing, many with noisy, underpowered engines, poor interior craftsmanship, cramped seating, and limited visibility. Earlier this year, the company announced that it would phase out some of its older products, including the Pacifica, the PT Cruiser convertible, and the Dodge Magnum. Those were some of Chrysler’s better vehicles in our testing, although some have been unreliable in our survey.
Overall, only a quarter of our recommended vehicles are from U.S. companies, which is a result of their vehicles’ inconsistent reliability and performance in our testing. About half of our recommended vehicles are Japanese.
TEST RESULTS VS. RELIABILITY
If the only things that mattered to a car buyer were performance, comfort, and safety, Mercedes-Benz and Volkswagen (including Audi) would make the dean’s list. Their cars ride and handle especially well, have comfortable seats, and have relatively good fuel economy and acceleration. But most VW-branded models and nearly all of the Mercedes models for which we have sufficient data are below average in predicted reliability.
On the other hand, Subarus have very good reliability. But in our testing they often end up only midpack within their classes. Subarus have standard all-wheel drive and typically deliver impressive ride and handling. But the Legacy and Outback suffer from tricky emergency handling and tight rear-seat leg room. And Subaru’s standard all-wheel drive typically hurts fuel economy.
Similarly, Mitsubishi and Ford ranked fourth and fifth in reliability but were dragged down by their test scores, finishing 11th and 12th overall.
In the end, the companies that make the best vehicles are those that have found a way to excel in all areas: performance, interior craftsmanship, safety, comfort, and reliability. The best all-around vehicles each year continue to set a higher and higher standard for other companies to match. And that’s a competition in which consumers are the ultimate winners.
07/25, 9:33 AM
posted by:
Htay9500
maxcar: I don’t think that your article from CR helps at all (they’re correct about subarus), but I’ve heard mazdas fairing better than hondas, as well as mazdas doing better than VWs themselves. if you creep over to vwvortex, if you do a thorough search, there are a slew of threads ranging from engine troubles on the 1.8t to electrical problems.