New VW Jetta Helps Volkswagen Achieve U.S. Profitability
Chalk up another victory for the new Volkswagen Jetta: Not only has Volkswagen’s new compact sedan become a true force with which to reckon in its segment, but it’s also having a noticeable “halo effect” on the rest of the automaker’s U.S. lineup; enough, in fact, that VW is now showing a positive balance sheet here for the first time since 2003. True, technically, it’s only VW’s sales ops that are in the black—not its manufacturing or financial services, according to reports from Automotive News—but it does represent an important step forward.
The news also gives us an opportunity to check in on VW’s progress toward achieving “400,000-450,000” annual sales in this country by 2013, a goal announced at the beginning of 2010. At the time, Volkswagen had just closed the books on a year in which a 4 percent sales decline was considered a strong performance, and had finished with sales of 213,454 units for 2009. Thus, VW was talking about doubling its annual sales in the span of fewer than five years, and this was during a time when a number of automakers were struggling to even survive.
Yet the company is now on pace to finish 2011 with nearly 310,000 sales, which would be roughly a 20 percent annual increase, the same as VW achieved in 2010. And all Volkswagen has to do to approach the 450,000-sales mark for 2013 is continue to earn sales at that same rate. That shouldn’t be so difficult once the Americanized Volkswagen Passat gets up to speed, but an incident at the recent Frankfurt Motor Show in Germany, as well as trends in the lux market, providing further fascinating insight regarding VW’s sales goals.
(And yes, I know that high sales don’t necessarily guarantee profitability—but they sure help matters.)