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Can VW Overtake Toyota and GM To Become #1?

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  • ohenryxohenryx Posts: 285
    DI is how the auto industry is trying to match diesel.

    I don’t think the auto industry is thinking about it in that way. They are concerned about fuel economy for two main reasons. The first is CAFÉ, and the second is because their customers want higher fuel mileage.

    DI (direct injection) and turbo charging are the direction that car manufacturers are moving. More power from a smaller engine, less weight, better fuel economy. It’s a win/win as far as they are concerned. The only one who doesn’t win is the poor car owner, the one who keeps his cars forever or who buys a used car with more than 100k on the clock.
  • yes I think D1 is more about getting power from a smaller powerplant, and thereby saving fuel and weight (and room) that way.

    I think the strategy of "how long will I own one?" is the best approach to buying a D1 car right now. Toyota (and I presume others) are re-engineering D1 as we speak, because they know there's a problem.

    I don't have the tech knowledge to shoo everyone away from D1, but having seen a fairly low miles, and relatively new VW with its cylinder head off, it's pretty incredible to see the amount of carbon buildup. On top of that, the whole thing is a devil to get off. Doesn't make for happy mechanics.

    But these cars drive great and have plenty of pep for a small engine, so I'm conflicted about the trade-offs.
  • "Toyota (and I presume others) are re-engineering D1 as we speak, because they know there's a problem."

    I imagine the known issues with DI is the very reason why Honda has been reluctant to use it even today.

    I've read for years Honda being criticized for being "behind the times" but they obviously know better this just proves it. One of the big reasons why they are one of my favorite brands, they don't follow "trends"...
  • hpmctorquehpmctorque Posts: 4,118
    I can't speak for the durability of DI components specifically, but I believe that modern lubricants, particularly motor oils, and especially synthetics, compensate for the greater wear associated with smaller, more highly stressed engines. In fact, in comparison with the conventional motor oils of yesteryear, they probably over compensate. It wasn't too many years ago when it was an achievement to get 100,000 from a domestic 6 or V8 without removing the head(s), and 125,000 was extraordinary. Yeah, a few even went 150,000, but that was rare. By contrast, today's engines routinely go over 100,000 miles, and 175,000 or more isn't unusual, if they're not abused and recommended maintenance schedules are followed.

    Fuel injection and unleaded gasoline also deserve credit for extending average engine life.
  • texasestexases Posts: 5,424
    I'd be ok with the complication and heat from turbos if it resulted in real-world gains in mpgs, but the road tests don't indicate that. From Car and Driver to Consumer Reports tests show that the cars fail to make their EPA numbers. Give me a high-compression naturally-aspirated car, like Mazda's approach.

    I wish BMW still offered a 3.0 l straight 6 without the turbo. One of the world's best engines, ever.
  • hpmctorquehpmctorque Posts: 4,118
    I'm frequently reminded of what an old German mechanic told me when I expressed concern that my '87 E30 was getting old and miled up (126,000). He said, "cars don't wear out, parts wear out." I assumed his message was "don't worry; you can drive the darned thing forever if you keep replacing parts, as needed." Well, I sold my E30 about 18 months ago because it needed $2,700 worth of work. I don't think it was a mistake to sell it, nor, in retrospect, would it have been a mistake to keep it.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,958
    Sounds a bit like the proverbial 100 year old ax - the one that's had five heads and seven handles.

    It's a bit hard to separate hype from real interest, but it looks like VW's CrossBlue Coupé concept is generating lots of headlines just ahead of the LA Auto Show.
  • gagricegagrice San DiegoPosts: 28,678
    VW needs to bring a smaller SUV with a 4 cylinder diesel engine. Either a Cross Blue or Tiguan. Not sure how they will fit 7 people comfortably in a vehicle smaller than a Touareg. If the Cross Blue comes in between the two current SUVs. Seems like VW comes out with more concept vehicles than most manufacturers. Could be they are more flush with cash than any of the others.
  • jayriderjayrider Posts: 3,195
    If VW pulls even with Toyota/Honda in reliability they would get my business. Working on that aspect of their cars doesn't seem to be a high priority. I love the vehicles but not the future repair potential.
  • watkinstwatkinst Posts: 122
    #1 VW lacks the number of unique models today

    Heck Even Subaru offers more unique models than VW does at this moment.

    #2 VW has a serious reliability be it perception or real issue problem it needs to fix. I don't see this happening given this perception and reality has been around since the 80's
  • gagricegagrice San DiegoPosts: 28,678
    When you are talking VW, it includes Porsche and Audi. Even in the USA they have far more models than Subaru. WW it is not even a contest with a small company like Subaru.

    If we are only talking numbers sold, McDonald's outsells all the automakers combined. If we are talking profit, then VW is far and away number ONE. They made more net profit last year than GM and Toyota combined.

    I will let you know in a couple years on the reliability issue. The first 6500 miles have surpassed the Toyota Sequoia reliability at the same point.
  • berriberri Posts: 4,001
    Audi and Porsche may have good reputations here, but VW I believe has a GM problem. Years back the generally low cost and mostly reliable Beetle had a very loyal buyer base. Unfortunately, many newer models did not. Combine that with lousy dealers and service and they blew their goodwill. I think VW will have to win over many new, younger buyers in the US if they are going to be relevant here because getting the burned old ones back is going to probably be as difficult for VW as it is for GM. I'm not sure those high profits are coming from VW and Skoda. I think they are a reflection more of Audi and Porsche? I hope you have continued good luck with your VW because I think any repairs you encounter will make the Toyota repairs look cheap, not to mention the wait for parts. But I do agree with you that VW is a leader in diesel and they can be fun to drive.
  • gagricegagrice San DiegoPosts: 28,678
    I think any repairs you encounter will make the Toyota repairs look cheap, not to mention the wait for parts.

    I know service is cheaper with VW than Toyota. I hit a turkey vulture at 70 MPH on the freeway in TN. It busted the grill on my new Touareg. When I returned home I ordered a new one from my dealer. Cost $270 and it was here the next day. By contrast I broke out a much smaller part on the grill of my 1978 Honda Accord in about 1983. Cost was $170 and it took months to get. That would be $400 in todays dollars. So I don't expect VW parts to be near as expensive as Honda.

    By the way my VW dealer is very new and trying hard to make a difference. Kearney Mesa VW is highly recommended. Much better than Poway Toyota which is no longer in business.
  • berriberri Posts: 4,001
    Poway - wasn't there some cable show about a funeral home there several years ago? The scenery around there sure broke the image of the San Diego area all being beautiful :-)
  • gagricegagrice San DiegoPosts: 28,678
    I agree with you about Poway. When I was a kid it was just a wide open spaces. Now it is home to 100s of multi million dollar McMansions. Lots of Hollywood folks moved to the area. The Toyota dealer in Poway changed hands twice after I bought mine there in 2007. We were by there a couple weeks ago and it is sitting empty. Toyota also closed their repair center in Santee that I used for warranty work. Still no shortage of Toyota dealers. We do have two new VW dealers. One of which I bought my Touareg from. The two times I was in to order the grill and pick it up. They were busy. According to Edmund's TMV my Lux model is selling for about $6k more than I paid the end of August. They seem to be in short supply at least here in San Diego area. I would have to drive to Orange County to find one. The seven dealers in San Diego County do not have a single Touareg TDI. I am happy I got mine while the gettin' was good.
  • berriberri Posts: 4,001
    I was thumbing through Business Week today. They had some partial industry stats that show Toyota had higher revenues and gross margins than VW. Not enough further details, but I'm guessing extraordinary items like Tsunami and UA write-offs may have lowered Toyota net profit. The BW pro forma projections indicate Toyota should outperform VW next year. Of course a year can be a long time. However, if things don't start turning around at the VW TN plant there will need to be write downs in the next few years for that. Until you brought it up, I didn't realize what a close race T and VW was. Thanks, this competition is interesting.
  • gagricegagrice San DiegoPosts: 28,678
    I think Forbes looks at companies as I would.

    Ranking companies on a single metric, like sales, can be misleading, which is why Forbes uses a composite ranking, giving equal weight to sales, profits, assets and market value. With this method, Volkswagen easily outpaces the No. 2 automaker on the list, Toyota, which is recovering from a series of natural disasters and self-inflicted wounds, and No. 6 GM. VW made $28.6 billion profit on $254 billion in revenues in 2012, and its assets were worth $408 billion. Yet its market value was only $94.4 billion compared to $162.2 billion for Toyota.

    Overall, Volkswagen ranks 14th on the Forbes Global 2000, with Toyota at No. 31 and GM at No. 70. For more on VW’s strategy to rule the world, read Forbes’ cover story here.


    http://www.forbes.com/sites/joannmuller/2013/04/18/vw-is-already-the-worlds-lead- ing-automaker/
  • gagricegagrice San DiegoPosts: 28,678
    edited November 2013
    How Volkswagen Will Rule The World

    ” Five years ago, on the eve of the Great Recession, he had laid out an aggressive plan to land Volkswagen at the top of the global auto industry by 2018, surpassing both General Motors and Toyota. “We’ve had three strong years,” he acknowledged. “You might feel good, but we have to stay focused.”

    His goal is more than just topping GM and Toyota financially. By 2018 Volkswagen will be “the world’s most profitable, fascinating and sustainable automobile manufacturer,” Winterkorn says, with annual sales of 10 million vehicles and a pretax profit margin of 8% or higher, compared with the modest 6% on sales of 6.2 million cars and trucks worldwide when he took over in 2007. He also intends to have the most satisfied customers and employees (there are 550,000 of the latter worldwide) in the industry. “Only an automaker who can achieve all these goals,” he tells FORBES, “can really call itself number one with justification.”


    http://www.forbes.com/sites/joannmuller/2013/04/17/volkswagens-mission-to-domina- - te-global-auto-industry-gets-noticeably-harder/
  • gagricegagrice San DiegoPosts: 28,678
    Hyundai: The World's Most Profitable Major Automaker Is A Bargain

    VW is over 10% profit margin. Who is this character. Hope no one uses them for financial advice.

    Hyundai Motor Company (OTC:HYMTF) is a South Korean based company, being the world's most profitable major automaker measured by operating profit margin. The company has achieved over the past few years an operating profit margin of about 10%, which is much higher than its global competitors average, which includes Ford (F), General Motors (GM), Toyota (TM) or Honda (HMC). Moreover, Hyundai is also trading at lower multiples than its peers, making it a compelling value investment for long-term investors. The company has a market capitalization of $24.7 billion, and is traded in the U.S. in the over-the-counter market.

    http://seekingalpha.com/article/1666802-hyundai-the-worlds-most-profitable-major- -automaker-is-a-bargain
  • berriberri Posts: 4,001
    Hard to tell what is all entailed in that analysis also. Does it include Audi, Porsche and Lexus? Toyota has had two bad years of extraordinary write-offs that do come into play. I think Forbes here is just "biggest' of everything combined. Personally, I like to see the footnotes in the 10K&Q reports because they can reveal a lot. Although T and VW are foreign companies, so they don't have to file them with the SEC and they have sometimes very different accounting rules overseas, as well as tax structures which can make a company profitability look better because VAT goes to the consumer instead of the company books sometimes. For example, I've always felt the UK has very loosey goosey accounting and I'd be curious how our accounting buddy Uplander sees that. I don't think this is the case for VW, but high assets on the balance sheet can actually be a bad thing sometimes. It can mean the company is bloated, or that it is not moving inventory well. I think the greater market cap of T is based on an assumption of higher growth potential. China may decide that one between them down the road, particularly if D3 keep gaining in the NA market.
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