- The Washington Times - Friday, October 19, 2001

Are you ready for a $50,000 Volkswagen? Well, ready or not, one is coming within a few years. VW is aiming a new generation of vehicles at car buyers who don't want to flaunt their affluence. Stefan Krebsfanger, manager of product strategy for Volkswagen of America, says the new vehicles will entice people as their lifestyles and incomes rise. "These customers want more refined and powerful cars," he says.

But don't expect VW to get out of the lower-priced categories. It intends to attract well-heeled customers without driving away Golf and Jetta buyers. Mr. Krebsfanger also says VW's lower-priced cars such as the recently introduced 2002 Golf GTI, Jetta and Passat will feature premium features such as a more powerful four-cylinder engine with 180 horsepower, up 30 from the previous engine. Also new this year for these cars is a five-speed automatic transmission with Tiptronic manual shifting without a clutch. That's a first in the Jetta segment.

Base price for the GTI 1.8T is $18,910. The Jetta 1.8T starts at $19,550. An optional GTI VR6 has a base price of $20,295. The new cars offer Side Curtain Protection, front air bags and side air bags. There's also a seat-belt tensioning system. VW has revised its warranty coverage increasing bumper-to-bumper coverage to four years and 50,000 miles. However, as a trade-off, powertrain coverage has dropped from 10 years or 100,000 miles to five years or 60,000 miles.

Look for VW to introduce a new eight-cylinder Passat that will have a suggested retail price approaching $35,000 next year. That's pricey enough to propel the car into the luxury segment. The Passat will be aimed at customers who are less badge conscious and have a mindset that's different from that of Mercedes or Lexus buyers. "Their orientation and driving preferences are closer to BMW buyers," Mr. Krebsfanger says.

He also says that VW's upscale models will not cannibalize sales of its sister division, Audi. Sales of that upscale brand have been growing at a dizzying pace for the last several years. Mr. Krebsfanger says that VW and Audi have distinctive buyers who do not overlap each other. He predicts that VW's march to more expensive heights will prevent Audi from continuing its march to higher sales.

Other upscale VW models will include an SUV with a price above $30,000 in luxury trim levels and even more powerful Passat models. A planned Passat V12 would "push the model's price well beyond $50,000," Mr. Krebsfanger says.

At the same time, VW will incorporate premium features in the lower-priced Golf and Jetta models, such as leather upholstery, automatic air conditioning and navigation systems. He says these can give the models premium status without raising their price points.

Mr. Krebsfanger says that VW sales will grow by about 6 percent, bringing the company's sales to about 360,000 units this year. He adds that the new models coming on stream will eventually push VW above the 500,000 unit-per-year mark in three to five years. That would still be below the brand's high level mark of 569,696 sales in 1970.

A few years ago, VW buyers opted for manual transmissions in nearly half of all vehicles purchased. As VW has made more conquest sales to former owners of Japanese cars, that phenomenon is changing dramatically.

Mr. Krebsfanger says that about 80 percent of Volkswagens now are purchased with automatic transmissions. That's a sharp increase for the brand, but the VW executive says that even new buyers are driving enthusiasts although shy about using clutches. That's where the Tiptronic clutchless automatic transmission fills the bill.

MOTOR MATTERS


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