European Importers--VW sales surpass even executives' projections

Consistently beating sales records month after month, Volkswagen AG is riding a virtual sales tidal wave into the new millennium.

Thanks to new products and improved quality, VW is enjoying stellar U.S. results. During the first eight months of the year, the automaker's sales jumped 38.5% to 211,629 units.

Even VW seems surprised by its U.S. performance. When the company launched the New Beetle in January 1998, executives said VW would grow 20% to 30% a year until 2000. Last year's sales rocketed a staggering 60.1% over 1997 and swift sales are expected into the new century.

Feisty Ferdinand Piech, VW's chairman, has done a great job turning around the company and bringing to market a strong vehicle lineup that has been completely redesigned in just the past two years. Although all but unchanged for 2000, VW should continue to see strong sales from its young-in-age and young-at-heart line of cars.

The company's New Beetle still turns heads. The newly redesigned Jetta and Golf are affordable, yet perceived as strong German performers. The Passat sedan and wagon continue to hold their own among the market's few truly stylish family cars.

But VW is looking to new U.S. segments to increase sales. It will enter the booming sport/utility vehicle market around 2002 with its Colorado SUV. Late to jump on the "bigger is better" bandwagon, VW should gain some repute for developing the vehicle with high-status Porsche AG.

Further accomodating to U.S. tastes, the company also is looking at building a pickup truck based on the SUV.

VW also will go head-to-head with rival Mercedes-Benz and with VW Group family member Audi AG with a new large car. The vehicle, dubbed the Passat Plus and Passat S in the press, is set to debut in 2001 with a 450-hp W-12 engine. If VW proves to have the credentials to play in the premium segments, there could be huge growth into the next century.

Audi erases competitive doubts with power injections

If there was any doubt Audi AG was a top contender in the German performance league, it should now be erased. For 2000, the company provides a serious dose of horsepower to practically every model in the range, in the effort to dispel the one perception that's hung with Audi for years: that its cars just don't have the power to compete with BMW and Mercedes.

For '00, Audi will enhance its entry-level A4 range with the S4 performance model. The A6, though undeniably stylish, has been plagued since its launch with a reputation for sluggish engine performance. The A6 line now enjoys the addition of two new DOHC powerplants: a 250-hp, twin-turbocharged 2.7L V-6 and a 300-hp 4.2L V-8 borrowed from the flagship A8.

Both new A6 engines drive all four wheels, as quattro is standard in the line. In addition, the A6's new 2.7L V-6 can be mated with a new 6-speed manual transmission. Audi believes the added horsepower credibility will bring the return of the A6 as "the effective center of gravity" in the Audi lineup.

The addition of the new high-power models, coupled with rising quality, will most likely grab some sales from the automaker's competitors in Munich and Stuttgart - and Audi of America executives couldn't be happier.

In August, U.S. deliveries rocketed 59.3% above like-1998, making it the importer's best August ever. Calendar 1999 sales are up 42.7% on year-ago. And most models are enjoying double-digit growth so far in 1999.

Audi of America Vice President Len Hunt is projecting calendar 1999 deliveries to reach 60,000 units. That would top 1998's results by 30% and represent Audi's strongest year since its 1985 peak, when it sold slightly more than 74,000 units in the U.S.

Audi believes its enhanced '00 models will prove so popular with buyers that calendar 2000 sales may surpass even Audi's 1985 high-water mark of more than 74,000, hit prior to the unintended sudden acceleration scandal that torpedoed Audi's reputation and sales. A performance like that would represent one of the decade's most strident comeback stories. As recently as 1996, Audi posted deliveries of only 27,379 units.

Porsche counting on a vibrant sports car market

Even though analysts might disagree, Porsche AG says the sports car market is not dying, and the company is rolling out several new products to prove it.

Later this year, Porsche is set to introduce the Boxster S. The roadster gets a 3.2L 250-hp. horizontally opposed 6-cyl. engine capable of 162 mph (260 km/h). That's 13 mph (21 km/h) faster than the traditional Boxster with its 2.5L, 201-hp "boxer" 6-cyl.

The company also will introduce the 911 Turbo with an engine based on the one that helped Porsche grab a victory in 1998 at Le Mans. This powerplant has twin turbochargers and can launch from 0-to-60 mph (97 km/h) in just 4 seconds. It also looks meaner with 18-in. wheels, a biplane spoiler on the rear decklid and a more dramatic front spoiler.

The cars will help Porsche capture its share of the supposed 140,000-unit (by 2004) U.S. sports car market. That's an 18% increase over last year's sales.

Sound difficult? Porsche is going strong, says the company. During the past five years the automaker's sales have increased 359% from 1993's paltry 3,700 units to 17,000 units sold last year, says Richard S. Ford, Porsche Cars North America executive vice president and chief operating officer.

But the company might be a little optimistic. The Economist Intelligence Units says the global sports car market will drop 21% by 2004. Instead, it says the sport/utility vehicle (SUV) segment will grow about 25% by 2004.

By this time, Porsche, too, will be a player in the SUV market. The German automaker will launch its own luxury utility vehicle in 2002. Developed with fellow German, Volkswagen AG, the SUV will "in every respect still be a Porsche," Mr. Ford says. In this new SUV - should enthusiasts decide to accept the idea of a Porsche SUV, much less its doubtlessly exorbitant price - lies Porsche's one true hope of markedly increasing its sales volume in the next century.

2000 holds good things from BMW

One can always count on good things from BMW AG, and model-year 2000 will be no different, from both the product and business sides of the company.

The German automaker has a slew of new products planned for the year, starting with the much-anticipated, much-talked- about and much-overdue X5. The automaker finally is launching its first BMW-badged sport/utility vehicle (SUV) - or sports/activity vehicle (SAV) in BMW talk. Whatever the acronym, the X5 will help BMW grab what it views as its rightful share of the global SUV market.

Launched with a 4.4L 282 hp V-8, the $49,970 X5 will get a V-6 version later in the year. More expensive than its Mercedes rival, the SAV will find an audience with affluent SUV buyers who spend more time at grocery stores and office buildings than in the great outdoors.

BMW also will capitalize on the new trend among young professionals - the station wagon. After returning to the wagon segment withthe 5-series wagon earlier this year, BMW also will launch its 3-series sport wagon for 2000.

Looking nothing like the brown, panel-covered station wagons of the '70s, BMW's interpretation promises both the utility of a station wagon and the performance of a BMW.

Other new models for 2000 include the 3-series coupe, European version of the M3, the 395-hp M5 and a facelifted Z3 roadster.

The automaker also will decided in 2000 whether or not it wants to bring Rover cars back to the U.S. The suffering British brand has brought BMW headaches and losses for years. Most likely its last ditch effort, BMW has promised a cash infusion to update the Longbridge, U.K., plant and redesign the 200/400 and Mini.

The launch of the new upscale Rover 75 has helped, but the company's future is still gray. New products undoubtedly will help the brand's performance in Europe and will be key to the decision of whether or not Rover will see sales on this side of the Atlantic. If all goes well, Americans may be driving a version of the 75 and cult-classic Mini within several years.