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Can VW Overtake Toyota and GM To Become #1?

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Comments

  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    That would be interesting....an F-150 "Lastwagen".
  • steverstever Guest Posts: 52,454
    "Subaru is on a roll; this year, it is poised to outsell Volkswagen in the United States."

    anythngbutgm, "What Does Subaru Know That Others Don't?" #653, 15 Nov 2013 6:36 am
  • jayriderjayrider Member Posts: 3,602
    Subaru has a reputation for reliability. VW ? Not so much. The secret isn't a secret after 40 years of real life data.
  • gagricegagrice Member Posts: 31,450
    As of October Subaru is 5000 vehicles ahead of VW. The Forester is their big seller with 56% increase. My daughter bought a new Forester and loves it. She was interested in the Outback until she drove both. What Subaru offers is cheap AWD vehicles. Not really a competitor in the USA. I would have looked at a diesel Forester with a good 7-8 speed automatic transmission.
  • texasestexases Member Posts: 10,707
    While I wouldn't have guessed Subaru would be the one, it's the fact that ALL companies are trying to sell more in the US that made VW's predictions of huge market share and volume increases in the US such nonsense. It's like 'everybody else will roll over' kind of logic...
  • gagricegagrice Member Posts: 31,450
    I think VW put high hopes on their diesel advantage. With diesel prices higher than gas by a wide margin, they are having a harder time selling them. The two I have bought first in 2005 and now this year, I got way below invoice. You can bet if diesel was same price as gas they would not have to discount. Less than two years ago they were getting a premium over MSRP on the Jetta Sportswagen TDI.

    I would not cry for VW. They still made more net profit in 2012 than GM, Toyota and Ford combined. That is more important than how many cars you sell.
  • berriberri Member Posts: 10,165
    "I would not cry for VW. They still made more net profit in 2012 than GM, Toyota and Ford combined."

    Thank you Audi and Porsche!
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    All VW has to do now is build a car that doesn't break. Then there's the carbon build up issue on VW direct injection engines. It's not pretty.
  • gagricegagrice Member Posts: 31,450
    Our friend Rocky is running all over the state of Michigan in a 2009 Jetta TDI with 249,000 miles on the ODO. If you can impress a diehard GM fan like Rocky, VW must be doing ok. I would never trade my current VW for anything GM or Toyota have to offer US.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I'm referring to gas engine problems, not diesels, and to VWs track record over the last ten years. It speaks for itself. Rocky is a database of one anyway, and I'm glad he likes his car. I like TDIs, too.
  • gagricegagrice Member Posts: 31,450
    Last gas powered VW I owned was a 1967 Bug. Never considered another gas powered VW. I think the truth is VW USA is probably one of the few places they can sell their gas powered vehicles. That means very little R&D money being spent gas engines. Though I understand most VWs sold in Brazil are able to run on RUG or 100% Ethanol.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    i sure wouldn't buy a direct injection VW right now.
  • hpmctorquehpmctorque Member Posts: 4,600
    edited November 2013
    VW is offering a new 1.8 turbo engine in Jettas VWs drive, ride and look. I also think VW quality and reliability is much improved versus ten years ago.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    edited November 2013
    is it a direct injection type? Oh yeah, I see that it is. Well, time will tell if this one suffers from carbon buildup. Usually around 60K I'm told, they're a real mess. I did see one recently with the head off at around that mileage, and the amount of carbon was pretty startling.
  • hpmctorquehpmctorque Member Posts: 4,600
    edited November 2013
    My daughter drives a '02 Jetta NA 2.0 manual with 82,000 miles on the odometer. Reliability has been better than decent, but not stellar. The two major problems were the following: The catalytic converter failed at about 60,000, but was replaced by VW because it's warranted to 80,000. Also, the water pump gave out at 72,000, so the timing belt was also changed at that time. That's it, other than a couple of tail light bulbs.

    In my daughter's opinion and mine, the Jetta compensates by being more fun to drive than, say, a '02 Civic. The Jetta also rides better, feels more planted and has better insulation from road noise than the Civic. She may replace it with another VW in the future.

    Motor oil has been 5W40 full synthetic since first oil change. Oil change intervals have been per the owners manual. No sludge problems.

    From what I've heard the 2.5 5-cylinder, which is being replaced by the new 1.8T, is bullet proof. Fuel efficiency is mediocre, though. I wouldn't be concerned about the reliability of the new 1.8T, although I'd want to cross shop it against the new Mazda 3 before committing to a new Jetta.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I'd say that buying into direct injection technology is a bit premature.

    This is an interesting article on the subject:

    Should You Buy A Car With Direct Injection?
  • hpmctorquehpmctorque Member Posts: 4,600
    Very interesting. Thanks. Are you suggesting that you'd avoid cars with DI until the reliability improves?
  • ohenryxohenryx Member Posts: 285
    I think it depends to a great degree on how long you plan to keep the car. If you're the type who buys a car and keeps it for 10 years and 150,000 miles, then I would say that you should avoid DI engines. At least for now.

    If, on the other hand, you usually keep your cars 3 or 4 years and 40k or 50k miles, then by all means get DI. It does improve both power and fuel mileage, so why wouldn't you want it?
  • texasestexases Member Posts: 10,707
    Soon we won't have much choice. CandD just ran an article on it, I think around 25% of cars now have DI, with major increases coming because of the better mpgs. So turbo small engines with DI will be the norm, it seems. LOTS to go wrong with those.

    Last BMW 328i review talked about how the DI turbo 4 sounded like a diesel at idle. Not something I'd like...
  • gagricegagrice Member Posts: 31,450
    DI is how the auto industry is trying to match diesel. Problem I see is these engines do offer good torque at the expense of fuel economy. They can be babied and get good FE. With diesel you get both at the same time. I would be interested in seeing a 5000 lb SUV driving across TX at 80 MPH getting 29.73 MPG. That tank was 555 miles average speed 71 MPH. By comparison on Fuelly.com the slightly lighter Explorer V6 twin Turbo is delivering about 18 MPG for the owners. Would be a big disappointment when they are supposed to be getting 24 MPG highway.
  • ohenryxohenryx Member 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.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    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.
  • anythngbutgmanythngbutgm Member Posts: 4,277
    "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 Member Posts: 4,600
    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 Member Posts: 10,707
    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 Member Posts: 4,600
    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.
  • steverstever Guest Posts: 52,454
    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 Member Posts: 31,450
    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 Member Posts: 3,602
    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 Member Posts: 119
    #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 Member Posts: 31,450
    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 Member Posts: 10,165
    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 Member Posts: 31,450
    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 Member Posts: 10,165
    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 Member Posts: 31,450
    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 Member Posts: 10,165
    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 Member Posts: 31,450
    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 Member Posts: 31,450
    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 Member Posts: 31,450
    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 Member Posts: 10,165
    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.
  • berriberri Member Posts: 10,165
    Personally, I think Hyundai is a tough one to analyze unless someone is inside Korea. Their inside company vendor dealings and government assistance can cloud things and possibly make them more vulnerable to government turn downs. On a more Macro level, I think Hyundai may be affected by how they compare to Japan before China comes onboard. If they can be considered similar globally to Toyota and Honda in industry position, then I don't think China will be a huge factor (at least initially). If not, they will be very vulnerable. Time is going to tell. I don't know which way to play that one.
  • texasestexases Member Posts: 10,707
    edited December 2013
    VW domestic sales last month were down 16.3% last month, when most makers were up big. Not a good sign.

    Well, better than Mitsubishi - they sold all of 12 i-MiEVs....
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    "Heinz-Jakob Neusser, Volkswagen's new head of research and development, has confirmed the automaker is still looking into launching a low-cost lineup of cars, vans and crossovers that will compete against Renault's Dacia division and Nissan's reborn Datsun."

    VW is definitely looking to make their products more affordable locally. I don't think these cheaper cars are coming to America though. VW will probably partner with a European or Asian automaker.
  • gagricegagrice Member Posts: 31,450
    Audi is picking up the slack. I imagine with a much better profit margin than selling Passats and Jettas with 0% financing. Here is what I see for the whole VW group. A big increase in their diesel sales.

    Audi A6 TDI finished the month at 12.5%
    Audi A7 TDI at 11.3%
    A8 TDI to 17.9%
    Audi Q5 TDI at 14.6%
    Audi Q7 TDI at 24.5%.

    High-mileage, TDI® Clean Diesel models accounted for 21 percent of sales in November and 24 percent of sales year-to-date, the best year-to-date results on record. Passat TDI sales reach 32,754 year-to-date, the best year-to-date TDI results on record.

    Looks to me like they are pushing their popular TDI engines to Audi and leaving a shortage for VW. They may have underestimated the demand for the best engines they offer. I can only find two VW Touareg TDIs in all of San Diego county. My dealership has not gotten one since the 2014 models have arrived. Who would want a gas Touareg???? I sure would not cry for VW. Better to have a shortage than nearly a million unsold vehicles on the lots like GM. 96 days supply seems like a lot to me.
  • steverstever Guest Posts: 52,454
    Browning out, Horn in.

    "Browning, a former manager at General Motors Co. and Ford Motor Co., “did a terrific job and he knew the next chapter was going to be daunting,” said Michelle Krebs, an analyst for auto researcher Edmunds.com. “To eke out even a fraction of a point of market share in the U.S. is significant, and what Volkswagen was looking to do was double sales by 2018. It just seemed unrealistic from the beginning.”

    While VW has risen to become the world’s third-largest carmaker thanks to growth in China and Brazil, the U.S. has remained something of a riddle for the company. Finding a solution to make VW more than just a niche player is key to achieving its goal of becoming the world’s biggest automaker."

    VW Names New U.S. Chief as Sales Slump Threatens Goals (Bloomberg)
  • gagricegagrice Member Posts: 31,450
    I must remind you VW has a ranking far more important than how many widgets they sell. I am sure they would like to have the numbers also. But they are more profitable than GM, Toyota, Fiat and Ford combined. Sixth most profitable company in the World.

    VW $27,909,000,000
    GM $7,585,000,000
    Toyota $9,349,800,000
    Fiat (Chrysler) $5,226,800,000
    Ford lost $5,664,000,000 are they due for a bailout now?

    Thankfully VW feels they can compete in the Luxury SUV market. I love what they have done with the Tourareg. Best one out there regardless of price. If they could just keep up with the demand for diesels they may even win the numbers game.
  • gagricegagrice Member Posts: 31,450
    Maybe GM would like to have VW's bottom line instead of selling lots of cars at low profit. Will her global outlook mean more products built off shore?

    Who is Mary Barra, the next CEO of GM?

    For years, Mary Barra has been a growing force within General Motors. While she wasn't a sure bet to be named to be first woman CEO of a major automaker, she certainly was well-positioned to make a run for it.

    As senior vice president for global product development for the past two years, Barra, 51, has had her fingers on the pulse of the giant automaker's entire car and truck portfolio worldwide. The position brought her into direct contact with the cutting edge of the company — which vehicles are needed around the globe, and how different markets can share them.

    As if the job weren't big enough, last August she was given the added responsibility of GM's entire purchasing and supply chain worldwide and became executive vice president. That put her in direct control of overseeing the thousands of suppliers and parts subsidiaries that account for everything that's needed to create a modern vehicle. It's an area where automakers are constantly tweaking in search of greater efficiencies and savings. It also can be a major headache, since mistakes made at the supplier level reflect on the automaker, not just the supplier.

    Yet, through it all, she has stayed true to her blue-collar Michigan roots as the daughter of a GM tool-and-die maker. "She's the real deal, very down to earth," says Dave Cole, chairman of Auto Harvest, a non-profit devoted to innovation. "She was not raised in an aristocracy."

    Barra's career at GM started in 1980, when she went to the Pontiac division as a "co-op student" through General Motors Institute, now Kettering University. She earned a bachelor's degree in electrical engineering and in 1990, earned her MBA from Stanford.

    "She was identified fairly early as someone who had a lot of potential," Cole says.

    http://www.usatoday.com/story/money/cars/2013/12/10/mary-barra-bio-gm/3951015/
  • steverstever Guest Posts: 52,454
    Yeah, VW kind of set themselves up for these kinds of headlines by setting sales goals in the press instead of bragging on their profits.
  • berriberri Member Posts: 10,165
    edited December 2013
    I think I'm a little more optimistic than you about the Barra promotion. She and Ruess, who were neck and neck for the CEO job, both have a simple mantra "no more crappy cars". I think that says something. They are admitting the need for improvement. I've always felt for example that American companies make better put together trucks and vans. I don't think they rattle as much as the Asians with age and they don't seem to allow as much road noise inside. But, the D3 problem is mechanical longevity vice Toyhonda. If they clean up engineering and purchasing I can actually see a GM vehicle down the road becoming more desirable. Of course, Japan has a habit of clutch hitting, so I guess time will tell.
  • gagricegagrice Member Posts: 31,450
    I have no opinion on Barra as CEO. I see the direction GM is taking and I don't think it has anything to do with good cars or bad. It has to do with shifting more of the content out of the USA. The 2007 GM PU trucks were 90% US/Canada Content. The 2014 are 40%. That is their biggest selling vehicles. And presumably most profitable. By contrast Toyota has increased US content in their top selling models.

    If I was in the market for a 2014 PU truck and wanted to put as many US workers as possible back to work, I would have to buy a Tundra at 75% US content.
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