Ferdinand Piech leaves VW supervisory board

[MacGuffin]

Ferdinand Piech leaves VW supervisory board

It's the supervisory board. Piech was head of that. Martin Winterkorn is the current CEO of Volkswagen.

While the CEO and the rest of the board of directors are merely employed managers, the supervisory board represents the owners plus representatives from the union and the workers council. They decide about who leads the corporation.

 

[jsausley]

There's a late 2000s New Beetle sitting out back that puts the lie to that.

Maybe it's just the Beetle. :lol:

I'm trying to think, but between some of my closest friends I know of now 10 VWs, 2008 and newer, with a total combined mileage of somewhere around 275,000 and the only issue I know of in that entire fleet was a faulty air-bag sensor or some kind in a 2012 VW GLI which required replacing. It cost about $120 I believe.

 

[Spectre]

Maybe it's just the Beetle. :lol:

I'm trying to think, but between some of my closest friends I know of now 10 VWs, 2008 and newer, with a total combined mileage of somewhere around 275,000 and the only issue I know of in that entire fleet was a faulty air-bag sensor or some kind in a 2012 VW GLI which required replacing. It cost about $120 I believe.

You might want to check with CrazyJeeper. His brother bought a GTI new in IIRC 2011 that developed all sorts of electrical weirdness. There's also the late 00s Passat subframe bolt debacle that VW won't fix, the EOS ever-leak roof problems that persist to this day, etc. etc.

Maybe they work fine in Germany, I don't know. But when even the German made ones come over here, are pampered by their owners and serviced on time by factory-trained mechanics at the dealership then fail early and often... well, there's reasons why VW is consistently in the worst 10 automakers by quality here even today.

On top of which, when the brand's reputation for customer service has (deservedly) gotten so bad that some dealers have to advertise that they're 'female-friendly' to try to get women back in the doors, you have a big, big problem.

 

[gaasc]

I still hold that it's the fact that VW has worse tolerances on hot climates. in .hn, which has shorter distances than America, VW's seem to work fine until year 7 or so at which point they pretty much disintegrate. Even the Brazilian models seem to go bork in the night. This is entirely empirical and non-scientific.

VW Brasillias, Air-cooled buses, Mk.I Golf pickups and Beetles are inmune to this.

 

[Spectre]

I still hold that it's the fact that VW has worse tolerances on hot climates. in .hn, which has shorter distances than America, VW's seem to work fine until year 7 or so at which point they pretty much disintegrate. Even the Brazilian models seem to go bork in the night. This is entirely empirical and non-scientific.

VW Brasillias, Air-cooled buses, Mk.I Golf pickups and Beetles are inmune to this.

The biggest problem with VW NA isn't the actual product itself per se, as bad as that is. It's the dealership experience and customer service combined with national corporate customer service. Here's a case in point - one of many easily found via Google so it's definitely not an isolated case: http://www.reesphotos.com/vw/

The important quotes are at the bottom with other people submitting items confirming VW's horrifically bad CRM. The most amusing one is from the Car Talk guys.

The VW apparent indifference to their problems is well known as shown in the October 4, 2014 "Car Talk" Q & A column by Tom and Ray Magliozzi: "If you had a Volkswagen, and your engine burned a quart of oil every 1000 miles, they'd tell you . . . to get lost."

They can improve their vehicles all they want, which they apparently haven't really done, but until they fix the dealerships and their North American corporate customer service they deserve to *burn*.

Read some more VW CRM and QC horror stories about post-2007 cars here: http://www.consumeraffairs.com/automotive/volkswagen.htm

 

[MacGuffin]

Ferdinand Piech leaves VW supervisory board

The biggest problem is that VW cars are expensive and that in America people are used to get cars for ridiculously cheap prices by putting less emphasis on quality. The U.S. Passat was already a step into the right direcetion but they didn't follow that strategy consequently enough.

In essence VW has to offer a cheaper and less refined line of products for the USA. Simply shipping over the European model range won't do.

 

[Spectre]

The biggest problem is that VW cars are expensive and that in America people are used to get cars for ridiculously cheap prices by putting less emphasis on quality. The U.S. Passat was already a step into the right direcetion but they didn't follow that strategy consequently enough.

In essence VW has to offer a cheaper and less refined line of products for the USA. Simply shipping over the European model range won't do.

Except that doesn't hold up upon first encounter with reality. Expensive and sophisticated doesn't have to mean 'breaks in 20 minutes' - there are directly competing cars in VW's price class in the US market that have far more sophistication, refinement and standard equipment than VW's offerings but *don't* have all the problems VWs do. Case in point: The Hyundai Sonata vice the Passat. About the same price, far more sophisticated, longer standard equipment list, better reputation, far better reliability and a big honking warranty - 10/100.

Speaking of warranty, VW has one of the *worst* warranties in the US at the current time. 3/36 bumper to bumper, 5/60 drivetrain. They *can't* bump those numbers up because they'd go bankrupt with all the problems the cars have here. Go read the link a couple posts up to see why.

VW has been selling inferior product in the US for *decades* and the chickens are finally coming home to roost.

Also, funny thing about shipping over the "European model range." That's exactly what Ford is doing and because of it they've basically got a license to print money at the current time. The Euro Fiesta, Focus, Mondeo? They're all sold here, with tech heavy packages, in large numbers. So "Euro model cars won't sell" doesn't fly either. In fact, if you restrict the sales numbers by excluding trucks and SUVs, the Mondeo/Fusion is the 4th best selling car in the US as of last month with 71,470 sold in March YTD. The Focus? 9th best, 52,994 sold YTD. The first VW product is the Jetta at #18 at 31,363 sold YTD with heavy discounting and even so it's a 16% decline year over year.

However, product quality isn't their biggest problem. Customer service is. Good customer service despite a horrible product kept Hyundai alive in the US for years, even when they literally had engines exploding out from their bread and butter cars. VW has been pissing all over their customers for the longest time and that's driving people away. VW's repeat customer numbers are terrible.

VW would do better spending the money they'd dump into US Phaeton certification on figuring out their customer service issues.

 

[headcrash]

...

Oh yeah, the resident forum troll is at it again. Please continue providing cherry-picked examples!

I can do it too, just look at this, last page: Customer Service Index Ranking Mass Market Brands| 2015 by J.D. Power and Associates
"The study measures customer satisfaction with service at a franchised dealer facility for maintenance or repair work among owners and lessees of 1- to 5-year-old vehicles"

 

[MacGuffin]

Ferdinand Piech leaves VW supervisory board

You can summarize it all in one word: Neglect.

For decades the U.S. Market wasn't considered important in VW's marketing strategy because the USA simply didn't favour the type of cars VW made: Small, economical, efficient but well-made. That only changed in recent years and in contrast to the Japanese and the Koreans VW didn't have a foot in the door already.

I don't buy for a second that all of the horror stories going around in America about VW are true or happened the way they are being described. Pure logic and common sense tell you that. VW has a very strong market position and a very good reputation in Europe, Russia, Asia, Africa and South America. Only not in North America. Why? Because they sort out their crappy cars and sell them there? Gimme a break, really...

The Koreans might have caught up with European carmakers but both technology-wise and quality-wise they're still not there. That's why the Koreans - in contrast to the Japanese - still rank very low here in terms of reputation and image. They're one step above of Dacia, when it comes to image and reputation, and still are being ranked behind the French and the Italians. Apparently if was much easier for the Koreans to be successful in America and surely not because Americans are known for being demanding customers. U.S. Car history shows the majority is anything but that.

Ford is a bad example, by the way, because it's an American brand with an established market share. Much easier for them o push their European products on the U.S. Market.

With the right strategy, VW will eventually catch up in USA, too. After all, recent history shows that even Toyota isn't invulnerable and cannot rest on their achievements. Things change, customer behavior changes.

But it will at least take another ten or fifteen years for VW. Thanks to neglect.

 

[Spectre]

Oh yeah, the resident forum troll is at it again. Please continue providing cherry-picked examples!

I can do it too, just look at this, last page: Customer Service Index Ranking Mass Market Brands| 2015 by J.D. Power and Associates
"The study measures customer satisfaction with service at a franchised dealer facility for maintenance or repair work among owners and lessees of 1- to 5-year-old vehicles"

Ah, yes, the guy who claimed the CLA was going to sell like hotcakes. Too bad it isn't; the C-class still outsells it. By around 2 or 3 to one, even. If your "volume seller" isn't selling in, uh, volume, you have a problem.

JD Power does not allow peer review of their data any more. They also laughably claimed Jaguar was the best in QC for a couple of years when that was clearly bullsh*t - I don't proclaim that as a win at *all* even though I'm a Jaguar fan. Frankly JD Powers just isn't trustworthy at this point.

 

[Dino]

Although all this has nothing to do with the actual topic, I'm pretty much with McGuffin on this one.

If VW had spent half the attention it does on China on the NA market, it would be a very different picture.
I'm not even sure it was purely neglect, but that VW has the wrong picture of what their target customer in NA demands, and never really bothered or got the right idea to fix it.

It is very strange though. It would seem that they are a good fit for NA tastes, especially considering the development over the last 10-15 years.
Give the customer a range of good allround vehicles at a decent price (slight premium cuz EU), give it the old european/german marketing spin and treat the customer like you are from a "socialist" country, aka decently.
You've got diesels? Even better, pit it against hybrids and get a competing trend going. Generate some buzz.
Done.

Doesn't seem too hard really, even neglecting all the other tools at their disposal...

 

[Spectre]

You can summarize it all in one word: Neglect.

For decades the U.S. Market wasn't considered important in VW's marketing strategy because the USA simply didn't favour the type of cars VW made: Small, economical, efficient but well-made. That only changed in recent years and in contrast to the Japanese and the Koreans VW didn't have a foot in the door already.

Ummmm... you might want to read this article. http://www.cheatsheet.com/automobiles/volkswagens-big-north-american-problem.html/?a=viewall

The MkIV Golf sold really, really, really well here, and that's now getting on towards two decades ago. There was quite the market for exactly those cars you claim wouldn't sell here - especially on the coasts.

I don't buy for a second that all of the horror stories going around in America about VW are true or happened the way they are being described. Pure logic and common sense tell you that. VW has a very strong market position and a very good reputation in Europe, Russia, Asia, Africa and South America. Only not in North America. Why? Because they sort out their crappy cars and sell them there? Gimme a break, really...

There are plenty of FG forum members with VWs in the USA that have confirmed these sorts of stories - remember katwalk's tribulations with her Beetle? For that matter, the press themselves have confirmed them from time to time. You can even go on the Vortex forums, the biggest forum in the world for VW owners, and read the problems for yourself.

The Koreans might have caught up with European carmakers but both technology-wise and quality-wise they're still not there. That's why the Koreans - in contrast to the Japanese - still rank very low here in terms of reputation and image. They're one step above of Dacia, when it comes to image and reputation, and still are being ranked behind the French and the Italians. Apparently if was much easier for the Koreans to be successful in America and surely not because Americans are known for being demanding customers. U.S. Car history shows the majority is anything but that.

Hate to tell you, but the European Korean cars are exactly the kind of thing you're thinking that VW needs to send to the US. Compared to their US offerings, the Euro-market Hyundais are stripper models with dumbed down everything. The US versions are much more well equipped and in some cases put the European product to shame. I refer you to Der Stig's thread about the car that replaced his E46 - a Hyundai Genesis. https://forums.finalgear.com/post-your-car/333hp-6-cylinder-rwd-kimchi-barge-58557/ You might want to read that and compare his *base* level equipment and such to the offerings in your market.

Ford is a bad example, by the way, because it's an American brand with an established market share. Much easier for them o push their European products on the U.S. Market.

Yes, and how did that work out the last times they tried that?

All of these were failures in the US market *despite* this supposed power of Ford to move anything they want in the US market.

With the right strategy, VW will eventually catch up in USA, too. After all, recent history shows that even Toyota isn't invulnerable and cannot rest on their achievements. Things change, customer behavior changes.

But it will at least take another ten or fifteen years for VW. Thanks to neglect.

Toyota's problems were also at least partially rooted in their own customer service failures of the time - bad product backed by bad customer service and in the case of Toyota epically inept PR = a lot of angry customers.

 

[Spectre]

If VW had spent half the attention it does on China on the NA market, it would be a very different picture.
I'm not even sure it was purely neglect, but that VW has the wrong picture of what their target customer in NA demands, and never really bothered or got the right idea to fix it.

I don't think it's neglect either, because VW spent a *lot* of time and resources trying to come up with new more competitive models for the US market from (even) 1990 to present. From my point of view, I can't really see neglect.

I think you're more correct in thinking they didn't understand the market or the target customer all that well as opposed to neglect. Leaving hardware quality out of the discussion just for the moment, there were many "WTF" moments in both their marketing and their designs. The Passat W8 comes immediately to mind as a marketing and customer understanding misstep of this type.

It is very strange though. It would seem that they are a good fit for NA tastes, especially considering the development over the last 10-15 years.
Give the customer a range of good allround vehicles at a decent price (slight premium cuz EU), give it the old european/german marketing spin and treat the customer like you are from a "socialist" country, aka decently.
You've got diesels? Even better, pit it against hybrids and get a competing trend going. Generate some buzz.
Done.

Doesn't seem too hard really, even neglecting all the other tools at their disposal...

Actually, they do (and have for years) offered some products that meet NA market niches quite nicely. For example, if you want a small diesel car in North America, even though there are more options available now, pretty much the only rational choice is a VW of some sort (despite the potential issues with the car attached to the engine and the company itself). There's more like that - the Jetta/Golf Sportwagen, for those who want a small wagon, as another example.

This is part of why I think that the real problem with VW in North America is less the hardware per se (and we're actually more forgiving of bad hardware as a market in some ways) and more the bad customer service driving people away. This in turn comes back to bad management; and bringing it back to the original topic, if Piech was responsible for any of the the NA market flops (like the Phaeton), bad management and incomprehension of what potential VW buyers wanted, then perhaps it's better that he's gone.

VW management can play with their product line all they want - they can make simplified models as MacGuffin proposes or they could copy Hyundai and start shipping loaded models at a bargain price. I just don't think it's going to make a whole lot of difference until they step back from the product and look around at the organization and management supporting it in the US.

 

[MacGuffin]

Well, at least we pulled the discussion down to a rational level now. Good!

I can agree with many you and Dins wrote before. The problems VW has in the USA right now, are completely home made. But I wouldn't say it wasn't Ferdinand Piech's fault. When he became CEO of Volkswagen AG in 1993, he had more ugent problems to solve than coming up with a market strategy for America - like saving VW from bankruptcy and turning it into a profitable company. He achieved that and then changed from CEO into the supervisory council. The kind of neglect (or lack of interest, if you want) in the American market lingered on, even though the problem was already addressed in the early years of the century. While BMW and Mercedes successfully moved some of their production to the United States, VW remained passive.

But it's not only the lack of a market strategy for the U.S. market that made Piech turn away from his former proteg? Martin Winterkorn. While the whole VAG corporation is making terrific profit, the VW brand has problems with the yield on sales - production is too expensive and there is a lack of a really cheap entry-level car for poorer markets in the world. Ferdinand Piech always was the kind of guy who not only looked towards tomorrow but towards the day after tomorrow. So he is/was very critical with Winterkorn's strategy for VW. Audi is doing very good, Porsche is doing very good, Skoda is doing very good, even Seat is finally starting to get on track. Only the core brand of the whole operation gives cause to long-term worry.

Martin Winterkorn is a very popular CEO with the labours and even the union likes him. So while Piech might have been right to doubt Winterkorns ability to press the right buttons for VW's future, he underestimated Winterkorn's support and popularity. As I said: He should have better waited and made sure he has the majority of the supersivory board behind him, instead of publically declaring a distance to Winterkorn in an interview.

My speculation now is that Winterkorn might become Piech's replacement as head of the supervisory board, while at the same time another one takes over the helm as CEO. The most promising candidate at the moment seems to be Porsche boss Matthias M?ller. But we'll see what the future brings.

P.S.: I have no idea why the Ford Sierra was a great failure in the USA. In Europe it was a huge success. But maybe the design was too futuristic for America back in the 1980's...

 

[chaos386]

In essence VW has to offer a cheaper and less refined line of products for the USA. Simply shipping over the European model range won't do.

Why not rebadge Skodas as Volkswagens, and sell those in the US?

 

[Perc]

P.S.: I have no idea why the Ford Sierra was a great failure in the USA. In Europe it was a huge success. But maybe the design was too futuristic for America back in the 1980's...

I would guess that it failed partly because it wasn't called Ford Sierra. It was called Merkur XR4Ti (and Merkur Scorpio, too). Nobody had the faintest idea what Merkur meant or stood for, or where they were made.

And yes, I'm told that the Sierra was pretty futuristic for its day even here. I was born around the same time as the car, so I couldn't comment. Considering what kind of designs Detroit were pumping out in the mid 1980's, the XR4Ti must have stood out like a store thumb at the Lincoln-Mercury dealer.

I spent most of my childhood in the back seat of a 1984 metallic blue 5 door, so it was a perfectly normal car to me. I had one myself too, a red 1990 sedan. I much prefer the later shape, especially in sedan form.

- - - Updated - - -

Why not rebadge Skodas as Volkswagens, and sell those in the US?

If that would happen, it would likely be the Octavia and Superb. Why would VW dealers want a slightly bigger Golf and a slightly bigger Passat?

Also, I don't think there will be a V6 version of the upcoming Superb.

 

[Spectre]

Well, at least we pulled the discussion down to a rational level now. Good!

Okay, guess facts and user experiences aren't 'rational' now.

I can agree with many you and Dins wrote before. The problems VW has in the USA right now, are completely home made. But I wouldn't say it wasn't Ferdinand Piech's fault. When he became CEO of Volkswagen AG in 1993, he had more ugent problems to solve than coming up with a market strategy for America - like saving VW from bankruptcy and turning it into a profitable company. He achieved that and then changed from CEO into the supervisory council. The kind of neglect (or lack of interest, if you want) in the American market lingered on, even though the problem was already addressed in the early years of the century. While BMW and Mercedes successfully moved some of their production to the United States, VW remained passive.

Erm, VW was the first foreign automaker to build cars in the US in the post-war era, being the first since Rolls-Royce (yes, that Rolls) stopped building cars in Springfield, Massachusetts in 1931. VW Westmoreland cranked out cars from 1978 until 1987. http://en.wikipedia.org/wiki/Volkswagen_Westmoreland_Assembly

They then moved production to their existing Puebla, Mexico facilities, where labor costs were lower and the UAW wasn't around to screw things up.

I wouldn't say they were exactly passive about their North American production.

But it's not only the lack of a market strategy for the U.S. market that made Piech turn away from his former proteg? Martin Winterkorn. While the whole VAG corporation is making terrific profit, the VW brand has problems with the yield on sales - production is too expensive and there is a lack of a really cheap entry-level car for poorer markets in the world.

Back in the 80s and 90s, they imported the VW Gol (not Golf) to the US. It was rebadged as the "Fox" and it was a *really* cheap entry level car; people bought quite a few of them. It's still in production and it's an entry-level car being sold in emerging/poorer markets around the world. Not seeing how you can say they don't have a product there when they already do.

P.S.: I have no idea why the Ford Sierra was a great failure in the USA. In Europe it was a huge success. But maybe the design was too futuristic for America back in the 1980's...

Yes, because that futuristic design was just too much for us poor benighted Amurricans. Why, we wouldn't buy anything but the 6000 SUX!

Except there's a problem with that assertion, quite a large one... The below was one of the best selling cars in America at the time:

The Taurus was, if anything,even *more* futuristic than the Sierra/Scorpio. So futuristic, in fact, it was used in barely modified form as the cop cars in the first Robocop movie.

So there goes that. Again, your assertion that "well, Ford is well established and could easily sell their Euro lineup or anything else they want in the US" doesn't hold up when you look at the historical record. I'll even give you another one; in the wake of the Fuel Crises in the 1970s, Ford imported a small European market Ford with good fuel economy, something that was suddenly in great demand especially with recent memories of fuel prices skyrocketing (for the day) and rationing being in place.

The Fiesta was imported to the US from 1978 to 1980 and then was taken out back and shot for lack of sales. The car that replaced it?

The American Escort was at best 'inspired' by the Euro one and the only real parts it shared was some drivetrains. The rest was all-American. It was terrible. It cost more than the Fiesta. It sold in enormous numbers starting in 1981.

Bottom line? Not even a Ford or GM (the Chevette/Kadett twins) can bring over 'the Euro lineup' and count on it selling. Brand market share or not.

To circle back to the original topic of VW management - the excuse of "our product is too complex for America" really, really doesn't fly. If that's what VW management really thinks about the NA market, quite a lot of somebodies need to be fired or be forced out if they want to make a real, lasting comeback in the NA market.

I'm wondering if VW's been using their NA operations as a dumping ground for less-competent or more-annoying execs/managers for the past couple of decades and if so, what hand Piech had in it.


- - - Updated - - -

And yes, I'm told that the Sierra was pretty futuristic for its day even here. I was born around the same time as the car, so I couldn't comment. Considering what kind of designs Detroit were pumping out in the mid 1980's, the XR4Ti must have stood out like a store thumb at the Lincoln-Mercury dealer.

Not really, considering this was what else was on sale next to it.

Mercury Tracer

Mercury Topaz

Mercury Cougar

Mercury Sable

The XR4Ti was a bit odd, but then in 1988 a lot of the designs you saw in a L-M dealership were. I remember seeing them at the neighborhood dealer when they were new as a kid and I didn't think they were nearly as weird as the 'pumpkin seed' Tracer parked next to them.

 

[rickhamilton620]

Another thing that doesn't help VW in the US market is the conservative styling of the Jetta and NMS Passat - While these are handsome cars that'll be timeless and age really well (the Passat is a prime example of this, being 4 years old now), they were put up against cars that weren't conservative in style in the slightest like the Focus, Elantra and Sonata. Buyers, particularly in the mainstream compact and mid-size segments, want to feel "special" and unique styling does that quite well, hitting people on a emotional level that the VW's just cant.

Conservative styling doesn't work here anymore. See the new Sonata. By all accounts its a better, higher quality, and more "timelessly" styled car than the outgoing model. Rumor has it that they went more conservative to appease Korean buyers who weren't quite feeling the polarizing shape of the outgoing car. But sales in the US have been meh because earlier buyers were enamored by how out there the previous model was. The result: A major mid cycle/emergency refresh is in the works to amp up the exterior styling, a'la the 2015 Camry.

Add in the fact that even the mid-cycle refresh of the Jetta was conservative in nature, especially in this age of major styling changes at every refresh in the US, and you can see why sales would be meh at best.

Objectively, they're solid cars - have gobs of space, pretty competitive pricing, decent powertrains (2.0L Jetta nonwithstanding), but they lack the "wow" factor that most buyers want these days.

They also needed a mid-size CUV/SUV that was way cheaper than the Touareg and had a adult size 3rd row like 3 to 4 years ago. The Tiguan is also woefully outdated in what is now one of America's hottest segments, the compact CUV market. It's so big that the segment is poised to outsell the mid-size sedan segment in due time. With new mainstream sub-compact entries like the HR-V and CX3 to complement luxury entries like the GLA, Encore, Evoque, et' al, the small CUV market is only going to get even hotter.

As much as we enthusiasts dig wagons, they're not where the money is.

 

[narf]

Also, I don't think there will be a V6 version of the upcoming Superb.

The range-topping 4-pot makes 20hp more than the old VR6, so why bother with the guzzler

 

[rickhamilton620]

The range-topping 4-pot makes 20hp more than the old VR6, so why bother with the guzzler

I agree. If they were to redo the lineup and bring the Superb over, they should go 4 cylinder only. Hyundai proved that people are willing to set aside the supposed need for a V6 (even though something like 70-80% of mid-size sedan buyers in 2011 when the 4 cylinder only Sonata/Optima launched chose 4 cylinders of the competition anyway) if the rest of the car is on point.

The V6 seems to be disappearing from the NA Passat lineup slowly but surely. You could get a V6 on trim levels as low as SE earlier in this generation. Now it's only available on range topping SEL Premium trim with a sticker of 36k.