VW Looks to Rein in Skoda to Prevent Sales Cannibalisation

It seems that Skoda sells too well at the moment. On the other hand the profit might not be that good for VW group and therefore they wants to sell more VW than Skoda in some segments. This means that not all extras will be available in future in Skodas.

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VW Looks to Rein in Skoda to Prevent Sales Cannibalisation

13 Oct 10

The first signs are appearing that VW is taking steps to creating a clearer definition of its brand structure and positioning, while at the same looking to protect its margins

IHS Global Insight Perspective

Significance

Volkswagen (VW) appears to be taking steps to more clearly define the positioning of its brands in an attempt to try and limit sales cannibalisation between its separate units.

Implications

One of the strategies appears to be to take equipment that was previously standard on the company's Skoda models and put it on the options list. There appears to be some anxiety within the wider VW Group that Skoda is competing too closely with the VW brand model in key markets, with Skoda having the advantage of significantly lower price points for equivalent models.

Outlook

With the addition of Porsche next year the Group will number ten brands and the task of managing the brand and model strategy will become even more difficult. It appears that there is too much complexity in VW Group's volume brand structure at the very least—especially if the company is serious about its ambitions to acquire the Alfa Romeo brand—with SEAT being the obvious casualty.

There are signs that the senior management of the Volkswagen (VW) Group is becoming increasingly focused on preventing sales cannibalisation between its brands. It appears that there is a move within the organisation to more clearly define the positioning of the various volume brands within the group, with special emphasis being placed on the relationship between the VW brand itself and Skoda. As the "mother brand" and by far the largest volume brand with in the overall group VW will always take precedence, both in terms of debuting new technology and in terms of positioning and marketing over the other volume brands within the group. When Skoda was acquired in 1991 it was always seen as the clear entry-level brand within the group. However, the leaps in quality and design that Skoda has made under VW's ownership, with the brand basing models on VW's platform and powertrain technology, means that in terms of its product offering Skoda has transformed itself over the past two decades. As a result the company now offers VW brand technology and build quality at a significantly lower price point than the VW brand in European markets.

However, according to an Automobilwoche report VW is now de-contenting certain items of equipment from the Skoda range, and making previously standard items optional extras. This would appear to be an initiative to principally boost margins, although it has the useful side-effect to the VW brand of reducing Skoda's value proposition in relation to VW brand products. For example, Skoda's Climatic semi-automatic climate control system with a cooled glove box has been cut. This extra feature was a particularly popular selling point in dealerships. On the company's Superb model, which has taken a massive amount of plaudits in the media and has beaten other VW Group products, including the Audi A6, in group tests Skoda has already removed the umbrella integrated in the rear door—another highly regarded feature. This is now only available as an optional extra. And on the new sporty Fabia RS, xenon lighting can no longer be ordered at extra charge, while it was standard on its predecessor. However, this move is proving extremely unpopular with Skoda's dealers, with the chairman of the Skoda's dealer association Thomas Peckruhn claiming that the move is hurting customer satisfaction. He does not believe that Skoda is taking significant sales from the VW brand. Peckruhn said, "We conquer customers from French brands such as Peugeot and Renault, including Dacia."

At the recent Paris Motor Show, Martin Winterkorn indicated that senior VW management believes that Skoda has already strayed too far into traditional VW territory in terms of design and quality, saying that, "We cannot have a Fabia with a higher value instrument panel then the Polo." It is thought in some circles that the recent replacement of Reinhard Jung with the former head of VW China Winfried Vahland was partly motivated by the increasingly unwanted crossover between the Skoda and the VW brands.

Outlook and Implications

Managing the overall group's model and brand structure, which is based on a successful platform-sharing strategy, is something that VW Group has managed very successfully over the past decade. Building models in the same segments on the same platform has been key to the VW Group's overall business strategy. For example the current VW Golf, Skoda Octavia, SEAT Leon and Audi A3 are all built off the same VW Group PQ35 platform, while powertrains are also shared across the ranges, albeit often with different features and power outputs. However, VW is now concerned that Skoda in particular is taking sales from higher margin models further up the brand spectrum. Purely from a business point it makes little sense for Skoda to take sales from higher-margin VW and Audi models. For example in Germany the entry-level Superb Estate sells for 2,500 euro less than the equivalent VW Passat, while the B-segment Fabia is 1,695 euro less than its sister model, the VW Polo. The Fabia was one of the biggest winners from the German scrappage scheme last year, with the model selling over 100,000 units in that market alone in 2009 (see World: 17 August 2010: Skoda Sales Rise 11.5% Y/Y in August), showing that some German consumers are less concerned about the badge on the car than they are about the value proposition on offer. There have already been some efforts to stem Skoda's creep into the territory of other VW Group products. For example it is noticeable that there is no six-cylinder diesel option in the Superb sedan and estate ranges. It was thought that senior Audi and VW marketing and engineering staff were vehemently opposed to such a model being offered. Hardly surprising when a V-6 diesel Superb would be a credible rival to equivalent Audi A6 version, which has a price point around 20% higher than the Superb. Bloomberg has reported data from the Center for Automotive Research at the University of Duisburg-Essen that VW is losing 500 million euro a year as a result of sales cannibalisation from VW to the cheaper Skoda and SEAT brands.

While the expanding portfolio has been key to the VW Group's expansion, to the point where it is looking to topple Toyota as the world's biggest volume carmaker by 2018, the task of managing these multiple brands and an ever expanding model range, which now numbers nearly 200 separate models, is unlikely to become any easier. This is especially the case with the integration of the Porsche brand as the Group's tenth brand in 2011. If VW is serious about its reported interest in the Alfa Romeo brand (see France: 1 October 2010: Paris Motor Show 2010: Fiat CEO Says Alfa Romeo Not for Sale), it also begs the question of how another volume brand, albeit one which has been criminally underexploited in recent years, will fit into the VW Group's structure. The obvious casualty to make way for Alfa Romeo would be SEAT as it would be difficult to see how the two brands could co-exist together in the same group. SEAT is basically in the last-chance saloon. The brand has been the only consistently loss-making unit in the VW Group in recent years and the Spanish manufacturer is being allowed a five-year plan to turn around its fortunes under the new management of James Muir. If this fails and the group does eventually acquire Alfa from FIAT it would make sense to position Skoda as the Group's single defined entry-level brand, and it already appears as if the ground is being prepared for this strategy.

VW Looks to Rein in Skoda to Prevent Sales Cannibalisation

It seems that Skoda sells too well at the moment. On the other hand the profit might not be that good for VW group and therefore they wants to sell more VW than Skoda in some segments. This means that not all extras will be available in future in Skodas.

-----

VW Looks to Rein in Skoda to Prevent Sales Cannibalisation

13 Oct 10

The first signs are appearing that VW is taking steps to creating a clearer definition of its brand structure and positioning, while at the same looking to protect its margins

IHS Global Insight Perspective

Significance

Volkswagen (VW) appears to be taking steps to more clearly define the positioning of its brands in an attempt to try and limit sales cannibalisation between its separate units.

Implications

One of the strategies appears to be to take equipment that was previously standard on the company's Skoda models and put it on the options list. There appears to be some anxiety within the wider VW Group that Skoda is competing too closely with the VW brand model in key markets, with Skoda having the advantage of significantly lower price points for equivalent models.

Outlook

With the addition of Porsche next year the Group will number ten brands and the task of managing the brand and model strategy will become even more difficult. It appears that there is too much complexity in VW Group's volume brand structure at the very least—especially if the company is serious about its ambitions to acquire the Alfa Romeo brand—with SEAT being the obvious casualty.

There are signs that the senior management of the Volkswagen (VW) Group is becoming increasingly focused on preventing sales cannibalisation between its brands. It appears that there is a move within the organisation to more clearly define the positioning of the various volume brands within the group, with special emphasis being placed on the relationship between the VW brand itself and Skoda. As the "mother brand" and by far the largest volume brand with in the overall group VW will always take precedence, both in terms of debuting new technology and in terms of positioning and marketing over the other volume brands within the group. When Skoda was acquired in 1991 it was always seen as the clear entry-level brand within the group. However, the leaps in quality and design that Skoda has made under VW's ownership, with the brand basing models on VW's platform and powertrain technology, means that in terms of its product offering Skoda has transformed itself over the past two decades. As a result the company now offers VW brand technology and build quality at a significantly lower price point than the VW brand in European markets.

However, according to an Automobilwoche report VW is now de-contenting certain items of equipment from the Skoda range, and making previously standard items optional extras. This would appear to be an initiative to principally boost margins, although it has the useful side-effect to the VW brand of reducing Skoda's value proposition in relation to VW brand products. For example, Skoda's Climatic semi-automatic climate control system with a cooled glove box has been cut. This extra feature was a particularly popular selling point in dealerships. On the company's Superb model, which has taken a massive amount of plaudits in the media and has beaten other VW Group products, including the Audi A6, in group tests Skoda has already removed the umbrella integrated in the rear door—another highly regarded feature. This is now only available as an optional extra. And on the new sporty Fabia RS, xenon lighting can no longer be ordered at extra charge, while it was standard on its predecessor. However, this move is proving extremely unpopular with Skoda's dealers, with the chairman of the Skoda's dealer association Thomas Peckruhn claiming that the move is hurting customer satisfaction. He does not believe that Skoda is taking significant sales from the VW brand. Peckruhn said, "We conquer customers from French brands such as Peugeot and Renault, including Dacia."

At the recent Paris Motor Show, Martin Winterkorn indicated that senior VW management believes that Skoda has already strayed too far into traditional VW territory in terms of design and quality, saying that, "We cannot have a Fabia with a higher value instrument panel then the Polo." It is thought in some circles that the recent replacement of Reinhard Jung with the former head of VW China Winfried Vahland was partly motivated by the increasingly unwanted crossover between the Skoda and the VW brands.

Outlook and Implications

Managing the overall group's model and brand structure, which is based on a successful platform-sharing strategy, is something that VW Group has managed very successfully over the past decade. Building models in the same segments on the same platform has been key to the VW Group's overall business strategy. For example the current VW Golf, Skoda Octavia, SEAT Leon and Audi A3 are all built off the same VW Group PQ35 platform, while powertrains are also shared across the ranges, albeit often with different features and power outputs. However, VW is now concerned that Skoda in particular is taking sales from higher margin models further up the brand spectrum. Purely from a business point it makes little sense for Skoda to take sales from higher-margin VW and Audi models. For example in Germany the entry-level Superb Estate sells for 2,500 euro less than the equivalent VW Passat, while the B-segment Fabia is 1,695 euro less than its sister model, the VW Polo. The Fabia was one of the biggest winners from the German scrappage scheme last year, with the model selling over 100,000 units in that market alone in 2009 (see World: 17 August 2010: Skoda Sales Rise 11.5% Y/Y in August), showing that some German consumers are less concerned about the badge on the car than they are about the value proposition on offer. There have already been some efforts to stem Skoda's creep into the territory of other VW Group products. For example it is noticeable that there is no six-cylinder diesel option in the Superb sedan and estate ranges. It was thought that senior Audi and VW marketing and engineering staff were vehemently opposed to such a model being offered. Hardly surprising when a V-6 diesel Superb would be a credible rival to equivalent Audi A6 version, which has a price point around 20% higher than the Superb. Bloomberg has reported data from the Center for Automotive Research at the University of Duisburg-Essen that VW is losing 500 million euro a year as a result of sales cannibalisation from VW to the cheaper Skoda and SEAT brands.

While the expanding portfolio has been key to the VW Group's expansion, to the point where it is looking to topple Toyota as the world's biggest volume carmaker by 2018, the task of managing these multiple brands and an ever expanding model range, which now numbers nearly 200 separate models, is unlikely to become any easier. This is especially the case with the integration of the Porsche brand as the Group's tenth brand in 2011. If VW is serious about its reported interest in the Alfa Romeo brand (see France: 1 October 2010: Paris Motor Show 2010: Fiat CEO Says Alfa Romeo Not for Sale), it also begs the question of how another volume brand, albeit one which has been criminally underexploited in recent years, will fit into the VW Group's structure. The obvious casualty to make way for Alfa Romeo would be SEAT as it would be difficult to see how the two brands could co-exist together in the same group. SEAT is basically in the last-chance saloon. The brand has been the only consistently loss-making unit in the VW Group in recent years and the Spanish manufacturer is being allowed a five-year plan to turn around its fortunes under the new management of James Muir. If this fails and the group does eventually acquire Alfa from FIAT it would make sense to position Skoda as the Group's single defined entry-level brand, and it already appears as if the ground is being prepared for this strategy.

I really do understand it from a political standpoint. But really, doesn't it just mean that we will go out buying "Mondeo's" in the future instead of products from the VW Group.

The VW brand with it's popular polo, golf, passat etc has allways had 1 BIG issue, and thats the price. You aren't getting what you're paying for.

Like the campaign for saving the whales, someone should do a website: SaveTheSkodas.com

Edited 15 October, 201015 yr by tomcatdk

Well, I have only one reaction after this message:

Get ye`er Skoda`s Now!!!!!!

Before it is too late

When this downgrading will be implemented, the Skoda`s that are sold today will certainly keep their second-hand value longer than usual

And I agree with the point that is made by the Skoda-dealers association: "This will hurt customer satisfaction..."

Fully agree with Doc Watchtower & tomcatdk. VW are going to cut off their nose to spite their face, result for VW :'(

They will shoot themselves in the foot. It is extremely small minded of them. they should be thinking the other way around. Keep Skoda excellent with excellent value, and make VW/Audi even better. Rather than downgrading the Skoda they should be upgrading the more premium brands. All the hard work and money that has been poured into Skoda could be wasted again.

Perhaps VW have this the wrong way round, if people are deserting VW for Skoda, maybe they should be looking at VW & not at Skoda, up spec the vw & dont increase prices.

They know that customers are looking for value for money, so obviously they need to address peoples perception that the VW products are not value for money to stop loss of sales.

By taking standard options out & making people pay for them, the value for money perception that Skoda currently has will go, & people will stop buying them, moving to kia, etc

Making the VW group loose money on both brands.

Most businesses address a products deficiency & improve that product, not devalue others.

If it wasnt for the value for money aspect, I would have gone for something else. Its all about value.

This looks like the first and last Skoda that I'll buy. Typical German attitude when the chips are down.

So they plan to turn a Skoda into a Suzuki then, all to protect the VW sales point, why not swap staff, let the VW builder's become Skoda ones and vice versa, that way a VW will become so much better built and offer so much more than it does now.

In the currect economic's, they should leave well alone, if Skoda sells and VW doesn't, then at least they are selling something, the way the plan is right now, they will sell nothing, because VW offer's nothing in the way of value, and if you have spare money you buy an Audi, if you don't you get a Skoda, there is no middle ground right now, mothball VW and take out the gooseberry.

Ford and Toyota will be laughing all the way to the bank if VW put this plan into fruition. The managers at VW are being very short-sighted if they don't see that.

We've just come through the worst economic crisis since 1929.... with companies and individuals all counting the pennies and looking for a good deal, Skoda sales figures were BOUND to rocket. What were they expecting? VW cars don't give you value for money, THAT'S where the problem lies.

I'm glad i've already ordered my new Superb (bizarrely enough, i have paperwork which states that it's got an umbrella as standard still?!). In 3 years time, i'm not going to be looking for an entry-level Passat. I'll be looking for a Mondeo or an Avensis with some nice kit included.

Hey, maybe those Phoenix guys that "saved" Rover could offer to buy Skoda?!

i have paperwork which states that it's got an umbrella as standard still

A small point I know, but I understood that this had been dropped from standard spec? A pity if true, it was one of the little things about the car which added to it's appeal. Anyone had a car recently with or without the umbrella?

Mark

A small point I know, but I understood that this had been dropped from standard spec? A pity if true, it was one of the little things about the car which added to it's appeal. Anyone had a car recently with or without the umbrella?

Mark

My car was delivered a couple of weeks ago without an umbrella.

However, I have to say that the value and quality proposition of Skoda was compelling for me this time round. I wouldn't have bought a Passat (too old a design), but an A5 Sportback was choice #1 until the Superb Estate came out.

I'm missing the Audi interior style, but the quality is right up there in the Skoda. It would be a shame if VW throw this away, but I am one of their customers would have spent much more on an Audi had the Skoda not been so good, so I guess that proves the point.

Haven't you seen the new advertising slogan.......

"Sounds like an Octavia"

Basically VAG (VW) let the cat out of the bag to the buying public when they showed everyone that they can make "expensive" cars without being expensive.

They shot themselves in the foot because everyone now knows that they have been ripping their customers off for years. They desperately need to back pedal now.

The Superb proves that a luxury car doesn't need to cost a fortune.

Other manufacturers will be applauding VAG for neutering Skoda this way because having high value Skodas at affordable prices is a huge embarrassment for them too as it shows their customers that they are being taken for a ride when they buy C or E Classes, A Classes, 3 or 5 Series' BMs with base equipment for more money than fully kitted out better Skodas !

After all the plaudits that the Superb got this year and last VAG will have no choice but to deliver a brutal cut to brand or risk it's treasured rip off margins on the other badges on it's Teutonic chest.

Hold on, maybe not entireley VAGs fault...

The bulk of a cars cost is labour, and in the Czech Republic salaries run at about 25% of the UK and German rates.

So VAG probably make more per car from a Skoda than a VW, and maybe even an Audi.

But if they can sell more Skodas at more profit, who cares? Well if they sell fewer VWs made in Wolfsburg they will have to cut production and workforce, so the German Unions would be miffed. And if they eat into Mercedes and BMW, the German Government would get a bit agitated.

Perhaps VAG are being pressured into slowing the move to Spain (Seat) and the Czech Republic???

Edited 15 October, 201015 yr by boxer

Makes you wonder with all the present skoda's on the road now, their prices will actually start going up in 2nd hand value, given what they have now as standard equipment....and what with the vat increasing and the extra's one will have to pay for having extra's in the new car, makes buying a 2nd car skoda a bargain, rather than buy new.

Vw need to take a look at their present models and ask themselves why is skoda out selling some of their branded models ! At the end of the day it is the customer that buys the product, and he/she has a limited budget, and if it means that some skoda's will have items deleted from the model concerned and be made available as an optional extra, then the way i see it, is that particular model will become even more of a bargain to buy , and to be honest they are nit picking on what is a very good model....take the new superb for example. Now if Vw want to sell more passats or what have you, then they should take out some of the luxuries in that particular model and reduce the price accordingly....because it makes sense to have more customers buying Vw branded vehicles and have more sales = more money !! Why make bentleys at a price most of us will never be able to afford, and possibly make a loss on every car they sell....makes much more sense to stick a skoda badge on the front grill in solid silver cheapen the interior a little bit and maybe just maybe we could all afford one ....that would be something......seeing the skoda mulsanne turbo going for like 80k instead of 200k for same car with a bentley badge.....i'd have one if it came out

Makes you wonder with all the present skoda's on the road now, their prices will actually start going up in 2nd hand value, given what they have now as standard equipment....and what with the vat increasing and the extra's one will have to pay for having extra's in the new car, makes buying a 2nd car skoda a bargain, rather than buy new.

Vw need to take a look at their present models and ask themselves why is skoda out selling some of their branded models ! At the end of the day it is the customer that buys the product, and he/she has a limited budget, and if it means that some skoda's will have items deleted from the model concerned and be made available as an optional extra, then the way i see it, is that particular model will become even more of a bargain to buy , and to be honest they are nit picking on what is a very good model....take the new superb for example. Now if Vw want to sell more passats or what have you, then they should take out some of the luxuries in that particular model and reduce the price accordingly....because it makes sense to have more customers buying Vw branded vehicles and have more sales = more money !! Why make bentleys at a price most of us will never be able to afford, and possibly make a loss on every car they sell....makes much more sense to stick a skoda badge on the front grill in solid silver cheapen the interior a little bit and maybe just maybe we could all afford one ....that would be something......seeing the skoda mulsanne turbo going for like 80k instead of 200k for same car with a bentley badge.....i'd have one if it came out

I think both boxer and skodanut make good points here but at the end of the day it's about margins - always will be - and right now the Skoda (although built in the Czech Republic) is not making the money that VAG need. Just because it might be cheaper to build doesn't mean they've got their sums right. If you have a cheaper product you have to sell an awful lot more of it to generate the turnover needed to recoup your outlay (investments) and meet your profit margins. Remember VAG has to answer to it's shareholders who quite frankly don't give a t..s what is being sold so long as the share price and dividends are on the up. Skoda is selling well but how are we to know if it is has reached the break even point to produce profits for VAG (not necessarily Skoda). If at the same time it is luring customers away from more profitable (read rip off margin) products such as the Passat and Audi's then a decision must be made to protect the perceived core brands of the VAG group.

I once more reiterate my view that VAG has made an almighty c..kup with Skoda; as having opened Pandora's Box to show clients that luxury cars don't require luxury wallets their ugly duckling brand is showing up the fact that the Emperor has no clothes. Nuff said. Right !

Edited 15 October, 201015 yr by Stormbird

All the more for Vw to do something about their own products...at least skoda are getting the buyers, and without the buyers Vw would be struggling, so if they took a leaf out of skoda's book and make cutbacks elsewhere, it would make financial sense to keep the brand going, but to start meddling with what is a very popular motor car is like what stormbird said....shooting ones self in the foot.....cars are to be sold, not to be reduced in standard fitments according to model just because the likes of passat arent doing very well.

I also see fiat are merging with chrysler uk, as it seems the way forward now to join together and combine business interests and to ride out the storm thats just around the corner...maybe Vw should even contemplate selling off a brand that isnt doing well or even stop making models that dont even sell...and concentrate their efforts on producing cars that the public want...good value and aim to be a little more reliable....oh and throw in a 100k mile warranty for good measure with no strings attached...then sales will increase....its a mathmatical certaincy !!

Stormbird: I agree it all about margins, that was my point, but I think you implied that VAG make less on Skoda's than VW.

In 2009 VW passenger cards made €600M on sales of 4M cars which reprsented 0.9% of sales (operating profit). Skoda made €203M on sales of 0.7M cars, and made 2.9% operating profit.

All figures were worse than 2008, but Skoda always made a higher margin.

Passat globally outsold the Superb by a factor of 14x. Passat increased slightly 2008-2009, but the Superb doubled.

Audi is a different story. Profits 2009 were 5.4%, down from 8.1, and A6 sales fell.

Stormbird: I agree it all about margins, that was my point, but I think you implied that VAG make less on Skoda's than VW.

In 2009 VW passenger cards made €600M on sales of 4M cars which reprsented 0.9% of sales (operating profit). Skoda made €203M on sales of 0.7M cars, and made 2.9% operating profit.

All figures were worse than 2008, but Skoda always made a higher margin.

Passat globally outsold the Superb by a factor of 14x. Passat increased slightly 2008-2009, but the Superb doubled.

Audi is a different story. Profits 2009 were 5.4%, down from 8.1, and A6 sales fell.

Thanks boxer. With those figures then the attitude of VAG viz-a-viz Skoda has nothing to do with business sense but what ..... spite ? If not for business reasons then why on earth would they now consider reducing Skoda's growing appeal ? I find it hard to understand the board of multinational company business taking apparently illogical decisions like this. VAG has been very clever in amassing it's portfolio of brands. Just read the epic battle for control of Porsche. Brilliant strategy to hold off an internal take over by Porsche and turning the tables around buying the brand for less than market value and kicking out the bosses to boot. How can such a board now make this kind of decision about Skoda ?

A lot of this is VW's own fault, they charged high prices for Passat's and Phaeton's, and ppl expect a bullet proof car for this sort of money, as the Passat has had many high cost fix failure's, people are walking away from VW because of two thing's, their attitude to paying out, and denial that their product is sub standard, take the Phaeton, lovely car, but are you going to part with 50k+ for a VW, or 50k+ for an A8, then the Passat, it's old, it's having a "new model" facelift, but still looks 2005 inside, instead you can have an Avensis for 5k less if you know where to buy one right, a bang up to date and better built Mondeo or Insignia, and that's before Honda offer you an Accord, all of which are better styled and better built, and you don't face the VW test to get work done when it goes wrong.

I'm kinda glad this is happening, for all too long VW has traded on something they aren't, now they are busted on it and ppl know the kudos effect doesn't cut it anymore, any proof needed, look at the Superb dashboard, then look at the Passat one, which one looks dated and which one looks up to date? and the Superb one won't creak everytime you apply minimal pressure to it, if VW has to, then they should build in the Czech to remain profitable, but personally I think the product is rubbish anyway, cut to the bone plastics lacking any real style, if you took the badges off, you'd swear the Superb was the VW and the Passat a Skoda, nope, change that to Kia.

Here's to having coffee with Roto in the Toyota dealer real soon while our car's have their service's, without the service guy telling us our 1/3 used brake pads need replacing, or that the dmf is failing and they aren't covered etc, the only thing save's VW right now is there isn't much middle ground, you either get a car that doesn't see the ramps, or one that does, if they had all the silly middle of the road faults as well, they'd be finished, it's sad really because I hold German product's with high regard normally, and VW is letting the side down with sub standard parts and materials.

A lot of this is VW's own fault, they charged high prices for Passat's and Phaeton's, and ppl expect a bullet proof car for this sort of money, as the Passat has had many high cost fix failure's, people are walking away from VW because of two thing's, their attitude to paying out, and denial that their product is sub standard, take the Phaeton, lovely car, but are you going to part with 50k+ for a VW, or 50k+ for an A8, then the Passat, it's old, it's having a "new model" facelift, but still looks 2005 inside, instead you can have an Avensis for 5k less if you know where to buy one right, a bang up to date and better built Mondeo or Insignia, and that's before Honda offer you an Accord, all of which are better styled and better built, and you don't face the VW test to get work done when it goes wrong.

I'm kinda glad this is happening, for all too long VW has traded on something they aren't, now they are busted on it and ppl know the kudos effect doesn't cut it anymore, any proof needed, look at the Superb dashboard, then look at the Passat one, which one looks dated and which one looks up to date? and the Superb one won't creak everytime you apply minimal pressure to it, if VW has to, then they should build in the Czech to remain profitable, but personally I think the product is rubbish anyway, cut to the bone plastics lacking any real style, if you took the badges off, you'd swear the Superb was the VW and the Passat a Skoda, nope, change that to Kia.

Here's to having coffee with Roto in the Toyota dealer real soon while our car's have their service's, without the service guy telling us our 1/3 used brake pads need replacing, or that the dmf is failing and they aren't covered etc, the only thing save's VW right now is there isn't much middle ground, you either get a car that doesn't see the ramps, or one that does, if they had all the silly middle of the road faults as well, they'd be finished, it's sad really because I hold German product's with high regard normally, and VW is letting the side down with sub standard parts and materials.

You are 100% right.

I've had Various Golfs, Polos, Passats, an A4 Estate and a TT Quattro. Apart from the build quality not matching the price ticket the service, at least at the dealers in our whole county is shoddy.