VW Beetle Expected to Benefit From Fresh Design, Diesel Option

NEW YORK – Volkswagen of America President and CEO Jonathan Browning expects the redesigned-for-’12 Beetle to buck the specialty-segment trend of dwindling sales momentum with age, and thinks the new diesel version could account for up to 20% of annual deliveries.

“This is a case of its own, really,” Browning tells Ward’s at the car’s reveal here today ahead of this week’s New York International Auto Show debut. “This isn’t a vehicle that has steep lifecycles, it is a vehicle that really has tremendous emotional connections for customers.

“We’re confident this will be an enduring product in the market,” he says.

Browning points to the vehicle’s 60-year heritage, interrupted in the U.S. in the 1980s before the “new” Beetle was reintroduced in 1998. Worldwide, it has accounted for some 23 million sales in its lifespan, which saw only two redesigns.

U.S. sales of the car have been declining since 1998, typical for an aging vehicle in a niche segment.

According to Ward’s data, sales peaked in 1999, with 83,434 deliveries and a runaway 63.9% of the small-specialty segment. But last year the Beetle delivered just 16,537 units, maintaining grip on a segment-leading 29% share.

In 2007, the last big sales year for the U.S. before the recession, 31,021 Beetles were sold, good for 17.8% of its segment.

Browning admits the car has lost some sales momentum, but says a fresh design meant to attract a wider swatch of buyers will put it back on track.

Beetle exterior sportier, more masculine.

The redesign punches up the Beetle’s sportiness and masculinity with a faster back, more pronounced wheel arches and big wheels and tires. The car also sits lower to the ground and is wider than its predecessor.

The sporty character carries over into the interior, which features a colorful painted or carbon-like dashboard insert.

First-time availability of VW’s 2.0L turbocharged diesel in the car does not hurt expectations, either. A 2.5L 5-cyl. gasoline engine will serve as the base motor, and a 2.0L gasoline turbo also will be available.

The 2.5L will mate to a 5-speed manual or 6-speed automatic transmission. The 2.0L gas turbo will get 6-speed automatic and manual choices, while the diesel is standard with VW’s direct-shift, dual-clutch gearbox.

“We think (the redesign) will really resonate in the marketplace, especially with the TDI in the lineup,” Browning says. “Customers are very interested in our clean-diesel technology.”

Inside, Beetle adds color.

The VW diesel, a 2-time Ward’s 10 Best Engines winner in the Jetta sedan, promises to deliver a peak 40 mpg (5.9 L/100 km) on the highway and 33 mpg (7.1 L/100 km) combined in the Beetle.

Portfolio-wide, diesel engines account for about 20% of all U.S. sales, Browning says, and he expects its penetration in the Beetle to run between 10% and 20%.

VW will continue to use its Puebla, Mexico, assembly plant as the sole source for the car, despite pushing it into China. The redesigned Beetle launches in the U.S. late in the third quarter this year, and hits Europe in the fourth quarter. It rolls out in Asia in February.

“The VW brand is very well-established in China and is an opportunity to bring a unique part of its heritage to the Chinese market,” Browning says, stopping short of sales predictions for either China or the U.S., its two most important markets.

“We’re putting a lot of focus” on the U.S. and China with the Beetle, he says.

Browning also declines to discuss pricing but expects it on par with segment competitors such as the Mini, which in ’10 ranged from $19,200 to $24,530.

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