VW cannabilises itself?

[Renegade]

Hi all - I recently came across some possibly troubling news (or rumour) that VW Asia is considering increasing the price of the lesser known VAG members with the hope of cutting down the cited competition with the Bora (Word is that for every Toledo sold, VW looses out selling a Bora, which, IMHO, for a market like S'pore, is crap as the two compete against different competitors). Anyone out there able to confirm this ?

 

It's be very sad for Toledo hopefuls like myself, tho', if this turns out to be true.....

Edited April 2, 2002 by Admin

[Fabiaman]

I am actually quite surprised VW took so long to make such a stand (or decision) abt the relative pricings of the Seats & Skodas versus the VW makes.

 

I always think to myself that if I am a VW management, I will continue to manufacture all the Skodas and Seats in Czech and Spain (where labour is cheaper) but instead of selling it as Skoda/Seat, I will sell them under the name VW. That means we wshould have VW Toledo or VW Octavia and be able to sell the cars much faster and probably for a slight premium pricing as well.

 

 

Hi all - I recently came across some possibly troubling news (or rumour) that VW Asia is considering increasing the price of the lesser known VAG members with the hope of cutting down the cited competition with the Bora (Word is that for every Toledo sold, VW looses out selling a Bora, which, IMHO, for a market like S'pore, is crap as the two compete against different competitors). Anyone out there able to confirm this ?

 

It's be very sad for Toledo hopefuls like myself, tho', if this turns out to be true.....

[Renegade]

I hear ya', friend. But remember that the VW platform sharing strategy, courtesy of one out-gone Dr Piech was to, among other things, allow VAG presence in as many market sectors as possible with minimal platform development investment, with minimal percieved brand prestige dilution.

 

Hence, the A3 platform shared between all the cars we've come to love (and ex-dealers, dislike) cover differing market segments. The fact that the Octavia-Toledo bunch are cheaper in a S'pore context is due, more or less, to the same reason - different market. Look, the rather over-priced Bora-A3 duo are priced such that they go head on with the likes of AR's 156 and Mondeo (hah, fat chance at that, I say), the 406 (?), etc while the Tody-Octy are targeted at those of us who would otherwise be considering a Civic or a....err....you know......

 

I love your suggestion of a VW Toledo - in fact, I'll probably be among the first ones to join the queue. Trouble is, what of the pricing ? If the pricing still stands, VW would then have itself to fight, unless it kills the dumpy Bora (Yay!) altogether, at which it then runs the risk of 'diluting' its market presence, which then goes against its drive to go upmarket. Alternatively, VAG could foresake the premium saloon sector, kill the Phaeton dreams.....am I making any sense here ?

[Renegade]

It's TRUE - not VW AP, but VW itself is apparently going to alter the pricing of cars like the Tody as 'for every Toledo sold, one less Bora leaves the factory'.

 

Just got a call from BM who confirmed my query - no confirmation on details and timeframes, yet, tho'......

[Seven11]

Reasonable reasonings that VW should just slap VW logos on the Skodas and Seats and sell them.

 

However, I can also see where the VW group is coming from in terms of their strategy in managing so many brands in so many places and all sharing basically sama sama engine.

 

Its all about branding.

 

Cheapo versions of the car - throw to Skoda & Seat to sell.

Higher end versions of the car - keep in Audi & VW.

 

That way, VW can sell cheap cars like the Fabias and Ibizas and still sell the top ends like Passats or Boras... all w/o cannabilising on the brand names.

[Ilmw]

Looking at Car costs in Feb'02, 1.6 Audi A3 is $92,076 and a 1.6 Toledo is $77,971. The A3 has an 18% premium.

 

But dealer selling price after COE is $128,000 and $93,900 respectively; A3 is now 36.3% more expensive!

[Renegade]

18% ? Wow, that's quite a bit, tho' I must I didn't know that - then again, is that not the purpose of Audi - to be the 'premium' brand of the VAG family ? Maybe that's how they live up to their tagging.

 

Speaking of Audi's a bit funny I find here but the A3's are about the same selling price as an equivalent Golf/Bora (think they used to be marginally cheaper) and an A4 in a similar level to the Passat (last I checked, an alu-trim 2.0l A4 is going for just about the same price as the entry-level 1.8T Passat )? I mean, if VAG's so worked up over cannibalising of sales, isn't the Audi-Volkswagen situation here, from a price point more serious than the Tody is to the Bora ? After all, apart from a very small handful of people I know (and that includes participants of this forum) Seat seems largely to be some unknown entity (Sey-a-art ? You mean Fiat, right ? Arrgghhhhh..... ). Even Skoda's got more brand recognition, albeit not always the desired one.