VW Focuses on Affordability

ROCHESTER, MI – Volkswagen of America Inc. wants its dealers to emphasize sporty Euro-styling and Teutonic engineering when pitching the redesigned ’06 Passat midsize sedan.

But VWA also wants showroom staffers to focus on something that has not been among the main selling points for some of its upscale models of late: the price.

'06 VW Passat

“This is a German car that’s very European, yet with an affordable price point,” says VWA Executive Vice President Len Hunt. “It really does pass the affordability test.”

With the Passat, VW wants a bigger piece of the premium midsize car segment, with total annual sales of about 2.7 million units.

Hunt says, “We’re trying to attack that segment.” But it can be price sensitive, a reality not lost on him. “You’ve got to get the affordability message across in the U.S. market.”

Referring to General Motors Corp.’s employee discount pricing for consumers, he adds: “We’re not making everyone an ‘employee,’ but we are offering an attractive lease plan and MSRP (manufacturer’s suggested retail price).

“Yet we don’t want dealers just to reach for the deal. It is important that they also explain the vehicle’s attributes, benefits and nuts and bolts. And if customers are new to VW, they must drive the car.

“VW dealers are excited about this car. It is really important to them.”

The price of the “value-edition” Passat with a 4-cyl 2L base engine is $22,950. A model with a new 2.0T turbocharged engine starts at $23,900. A version with a 3.6L narrow-angle V-6 – an engine technology that returns to Passat – starts at $29,950.

A 3-year, 36,000-mile (57,900-km) lease is $289 a month, with $1,400 down.

Prices for the ’05 Passat ranged from $23,360 for the model with a base engine to $30,865 for one powered by a V-6.

In recent years, VW has introduced upmarket vehicles with hefty prices, such as the Toureg cross/utility vehicle at $37,140 and the Phaeton luxury sedan with a sticker range of $66,950-$96,100. The bargain days of the old Beetle – which sold for about $1,500 in the 1960s – had become ancient history.

“With the Toureg and Phaeton, you are moving into segments you weren’t in but needed to be in,” says Hunt. “However, those prices were new to VW dealers.”

He expects annual U.S. sales of 75,000 Passats. The car has been sold here since 1997. VWA’s volume leader is the Jetta with sales of more than 100,000 units.

In addition to the engine changes, the new Passat is equipped with an advanced 4-link independent rear suspension and a new handling system that provides active-return steering and straight-ahead driving correction assistance.

Safety features include eight airbags and electronic stabilization. “You don’t just get a German car that hurdles you down the autobahn,” says Hunt.

VWA showed the sixth-generation Passat here at Meadow Brook Hall, a historic estate that will host a weekend Concourse d’Elegance. It is the first time a European auto maker has revealed a new product at the event.

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