Here’s Why Volkswagen’s Strategy Is Doomed To FailS

If you spend a lot of time reading about the auto industry, you’ve probably already heard that Volkswagen Group of America chief executive Jonathan Browning is out. Gone. Kaput. Split. Sayonara. (I should mention at this point that I merely mean he has left the company. He has not been killed. He would’ve been killed if Volkswagen was Russian, but the Germans are far more passive-aggressive. They probably disconnected his Blackberry.)

Officially, Browning is leaving for personal reasons, though he neglected to elaborate on what those might be. My guess is he’s leaving “to spend more time with his family,” which has been an excellent Official Reason For Leaving ever since Richard Nixon hired those men to break into an office building, then recorded himself talking about it, then attempted to cover it up, then resigned to spend more time with his family.

But as an auto industry observer, you get the sense that there may be a little more to Browning’s departure than “personal reasons.” You get the sense – and I am reading between the lines here, so forgive me if I’m totally off-base – that he was (DUN DUN DUNNN…) forced to resign.

Now, for those of you who aren’t up on the latest industry news and events, you might be wondering why Volkswagen would force a chief executive to quit. In fact, you might be thinking: How could they fire him? He’s been so successful! I’m sure of this because I now see dozens of Volkswagens every day, and not just at my local junkyard!

But unfortunately, it’s this kind of small-minded thinking that got Jonathan Browning in trouble. You see, you’re not supposed to see dozens of Volkswagens. You’re supposed to see millions of Volkswagens. Under Volkswagen’s latest volume targets, which they created by simply adding zeroes to earlier volume targets, you’re supposed to be driving a Volkswagen. I’m supposed to be driving a Volkswagen. Richard Nixon was supposed to be spending more time with his family in a well-equipped Routan.

But there’s just one problem with Volkswagen’s volume goals: they’re absolutely and totally unachievable. And now I, a noted industry veteran who once crashed a Porsche 911 into a tree, am going to tell you why.

Reason Number One: They’ve Alienated Loyal Volkswagen People

I don’t know about you, but I know a lot of people who really like Volkswagen. You see these people at Cars and Coffee. They run in packs. They take normal, traditional commuter cars, like those early-2000s Jettas that were always driven by hot sorority girls, and they modify them. Lowered suspensions. Rims. “Illest” stickers on the rear windows.

To this day, I’ve never been able to explain this portion of the car culture. You know, and I know, that Volkswagens from this era are generally awful cars. They cost more than a Corolla to buy, they cost more than a Corolla to own, and they were built in a Mexican factory where “quality control” generally consisted of making sure your average lineworker didn’t leave his sandwich in the glovebox when the car got loaded on a truck. And yet, for some unknown reason, this crowd loves these cars.

By going mainstream, Volkswagen is turning its back on these Volkswagen loyalists. Do you really think the “illest” crowd is going to embrace the current Jetta, which looks like the designer was tasked with averaging out the lines on every other sedan sold in the last decade? Do you really think they’ll fall in love with the roomy, family-oriented Passat, which drives like every other roomy, family-oriented sedan created in the last decade, regardless of what Motor Trend says?

Hell no they won’t! They’ll probably go back to tuning Hondas. Which wouldn’t be such a problem if Volkswagen could get regular, mainstream folks to like their cars. But, unfortunately...

Reason Number Two: Normal People Think Volkswagens Are Crap

By taking its designs mainstream, Volkswagen’s primary goal is to appeal to the kind of people who have a Toyota, or a Honda, or a Nissan. But here’s the problem: those people won’t buy a Volkswagen!

Allow me to illustrate my point with an example. Let’s consider the case of Donald, a 58-year-old accountant from Delaware who I just made up. Donald drives a Camry. Donald has always driven a Camry. Donald once considered an Accord, but then his wife thought better of it. “Donald, are you crazy?!” she asked. It was an emotional day for Donald; nearly as exciting as the time he almost wore a purple shirt to work.

So Volkswagen comes out with a new Passat, which they say is way better than the last one. There’s a fuel-efficient diesel. There’s a powerful V6. There’s more interior room. There’s mainstream pricing. There are softer, more traditional lines.

So what does Donald do? Does Donald buy the new Passat?

Hell no! Donald buys another Camry, because he has a dentist friend who once owned a 2004 Touareg, the very same Touareg whose automatic headlights turned off whenever an oncoming vehicle approached with its headlights on, because the Touareg thought those headlights were the sun. Donald doesn’t want anything to do with this piece of crap car brand.

Now, I should say that there is a formula for changing a perception of poor quality. I call it the “Hyundai Doctrine,” and it involves offering a new-car warranty that’s longer than the average American marriage. This, and only this, will help people get over that inkling feeling that your product may, at any time as you drive down the highway, begin shooting flames out the wheel wells.

Unfortunately, Volkswagen hasn’t done this. Not that it would matter anyway, because…

Reason Number Three: They Don’t Have An SUV

I’ve decided to approach my third and final reason why Volkswagen’s volume goals are unreachable with a few facts. They are:

1. Last year, American consumers purchased approximately 6.4 billion SUVs and crossovers.
2. Most automakers offer a wide variety of SUVs at various price points and different sizes.
3. Volkswagen only offers the Tiguan and Touareg, which were priced using the brand’s age-old theory: Check out the competition’s pricing, then make ours much higher.
4. The result is that Volkswagen’s market share is approximately 0.004 percent, or zero if you take out company cars.

Yes, it’s true: while the Toyota Highlander, Ford Edge, and Honda Pilot start at or below $30,000, the Touareg starts at $44,000. And that’s for a base model with no sunroof, no reversing camera, and leatherette. The result is that no one purchases the Touareg, especially when the Audi Q7 – which has a third-row seat – is just three grand more. (If you’re waiting for the punchline to this paragraph, there isn’t one. I feel the Touareg’s pricing strategy is humorous enough.)

This sort of pricing is definitely unusual, but one could argue that it’s also completely understandable. After all: how could Volkswagen have time to create a competitively priced midsize SUV when it’s busy developing other highly successful, highly profitable volume-sellers, such as the Eos?

So Volkswagen has some issues. They need a high-volume SUV. They’ve alienated their loyal following. And they haven’t replaced those followers with a new breed of Volkswagen loyalists. Considering all of these problems, is it possible that Volkswagen might still hit its volume targets? Maybe. But if I were to bet on it, I think there’s a different scenario that’s far more likely: Volkswagen’s next CEO, whoever that may be, will soon be spending a lot more time with his family.

@DougDeMuro is the author of Plays With Cars. He operates PlaysWithCars.com. He owned an E63 AMG wagon and once tried to evade police at the Tail of the Dragon using a pontoon boat. (It didn't work.) He worked as a manager for Porsche Cars North America before quitting to become a writer, largely because it meant he no longer had to wear pants. Also, he wrote this entire bio himself in the third person.