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Cars and Drivers

Volkswagen Fails in the U.S.

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Updated Published
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VWJettaSportwagenTDI
Courtesy Volkswagen AG
With only one exception, Volkswagen of America is the least successful big car company with a presence in the United States. And that presence is dwindling as consumers find better alternatives to its products. VW global management says it hopes to pass Toyota Motor Corp. (NYSE: TM) and General Motors Co. (NYSE: GM) as the largest auto manufacturer in the world. Without impressive sales in America, the world’s second largest car market after China, that is impossible.

Volkswagen sold 314,833 vehicles in the United States through September, down from 323,090 in the same period of last year. That means sales are off almost 3% in an American market in which car and light truck sales are up more than 8% for the same period.

Hyundai and its stable mate Kia have done about as badly as VW. Some of their troubles can be blamed on the scandal triggered by the very public confession that the miles per gallon their cars get were inflated. VW does not have a convenient excuse like that one.

At the core of VW’s disadvantage is that the buying public does not think much of its cars. In the 2013 J.D. Power measure of initial quality, Volkswagen was well down the list. In the J.D. Power dependability study, VW’s numbers are even worse.

Another of VW’s problems is its small line up of models. It has only three sedans and two compacts. And it has only two SUV models. Even Subaru, which has sales in the same range as VW, has a larger list of models.

VW cannot succeed in America without a greater number of models and better grades for quality. Its market share in the United States is well under 3%, and that figure is shrinking.

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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